President William Ruto has signed into law the Central Bank of Kenya CBK (Amendment) Bill, 2026, introducing far-reaching reforms aimed at strengthening the country’s financial system, improving banking regulation and enhancing the Central Bank’s ability to respond to financial crises.
Announcing the development, Ruto said the new law creates a clear legal distinction between the Central Bank of Kenya’s routine monetary policy operations and Emergency Liquidity Assistance (ELA), a move expected to improve the country’s preparedness for financial shocks while safeguarding taxpayers and the banking sector.
"The new law introduces a distinct legal framework separating the Central Bank's routine monetary policy operations from Emergency Liquidity Assistance (ELA). The move will improve Kenya's preparedness to respond to financial crises while protecting taxpayers and the banking sector," Ruto said.
Under the amendments, Emergency Liquidity Assistance will only be available to banks that meet strict requirements on solvency, viability and systemic importance, ensuring extraordinary support is reserved for genuine financial emergencies.
The legislation also broadens the Central Bank’s mandate by making financial system stability and sound banking regulation secondary objectives while retaining price stability as its primary responsibility. It further formalises the institution’s role in promoting the integrity and resilience of Kenya’s financial sector.
To strengthen governance, nominees for the position of Deputy Governor will now undergo vetting and approval by the National Assembly before appointment, aligning the process with that of the Governor and enhancing parliamentary oversight.
Details of Central Bank of Kenya (CBK) bill
The law also gives legal backing to the Central Bank of Kenya Institute of Monetary Studies, enabling greater collaboration with local, regional and international institutions on research, training and knowledge sharing.
Other reforms include updating the law to recognise the Kenya Deposit Insurance Corporation in place of the defunct Deposit Protection Fund Board and clarifying the Central Bank’s authority to hold gold and other precious metals as part of its reserves, a move expected to support Kenya’s growing mining sector and align the country with regional best practice.
In a separate development, Ruto also assented to the Parliamentary Pensions (Amendment) Bill, 2023, which aligns the parliamentary pension framework with the 2010 Constitution.
The amended law formally recognises both the National Assembly and the Senate in the administration of parliamentary pensions, extending equal pension benefits to senators and members of the National Assembly.
Among the changes introduced are a new definition of a child as a person below the age of 18, up from 16, in line with the Constitution, and the reconstitution of the Parliamentary Pensions Management Committee and Appeals Committee to include representation from both Houses of Parliament.
The law also retains gratuity payments only for legislators who serve for less than five years, preserving the government’s broader public service pension policy.
