Major changes in the new CBK law

Banks seeking emergency financial support from the Central Bank of Kenya (CBK) will have to prove they are fundamentally sound before receiving any rescue funding under the new law.

The legislation requires that only banks that are solvent, commercially viable and whose failure could threaten the wider financial system qualify for emergency liquidity from the regulator.

The changes that seek to tighten safeguards around lender-of-last-resort interventions come just weeks after the government extended the Sh10 billion core capital requirement for banks to 2032.

The Central Bank of Kenya (Amendment) Act, 2026, which received presidential assent into law on Monday, introduces a formal framework governing Emergency Liquidity Assistance (ELA).

The move represents one of the most significant reforms to Kenya's banking safety net in recent years, aligning the country's financial stability framework with international banking standards while reducing the likelihood of public resources being used to prop up fundamentally weak lenders.