President William Ruto has signed the Central Bank of Kenya (Amendment) Bill, 2026, into law, ushering in sweeping reforms aimed at strengthening financial stability, improving banking oversight and enhancing the Central Bank of Kenya’s ability to respond to financial crises.
The new law creates a clear legal distinction between the Central Bank’s normal monetary policy operations and Emergency Liquidity Assistance (ELA), which is offered to banks during periods of financial distress.
Under the amendment, emergency liquidity support will only be available to banks that meet strict conditions on solvency, viability and systemic importance.
President Ruto Assents to CBK Amendment Bill. Photo: Courtesy.
The move is intended to ensure public funds are protected while enhancing the country’s preparedness to deal with financial shocks.
The legislation also elevates financial system stability and sound banking regulation as secondary objectives of the Central Bank, while retaining price stability as its primary mandate.
In addition, nominees for the position of Deputy Governor of the Central Bank will now be subject to vetting and approval by the National Assembly before appointment, bringing the process in line with that of the Governor.
The law further gives legal backing to the Central Bank of Kenya Institute of Monetary Studies, enabling it to strengthen training and collaborate with national, regional and international institutions.
It also updates the Central Bank Act by replacing references to the defunct Deposit Protection Fund Board with the Kenya Deposit Insurance Corporation and clarifies the bank’s authority to hold and trade in gold and other precious metals as part of managing the country’s reserves.
At the same time, President Ruto assented to the Parliamentary Pensions (Amendment) Bill, 2023, which aligns the parliamentary pension framework with the 2010 Constitution.
The law extends pension benefits to senators under the same framework as Members of the National Assembly, raises the definition of a child from below 16 years to below 18 years in line with the Constitution, and restructures the Parliamentary Pensions Management Committee and the Appeals Committee to include representatives from both Houses.
The amendment also retains gratuity payments only for legislators who serve for less than five years, in line with the government’s public service pension policy.
