Point in Time
Act No: CAP. 491
Act Title: CENTRAL BANK OF KENYA
[ Date of assent: 24th March, 1966. ]
Arrangement of Sections
PART I – PRELIMINARY
1.
Short title

This Act may be cited as the Central Bank of Kenya Act.

PART II – ESTABLISHMENT, CONSTITUTION AND OBJECTS
3.
Establishment of Bank and legal status
(1)

There is hereby established a bank which shall be known as the Central Bank of Kenya and which shall also be known by the alternative corporate name of the Banki Kuu ya Kenya.

(2)

The Bank shall be a body corporate with perpetual succession and a common seal, with power to acquire, own, possess and dispose of property, to contract, and to sue and to be sued in its own name.

(3)

The Bank shall exercise any type of central banking function unless specifically excluded under this Act, and shall enjoy all the prerogatives of a central bank.

(4)

The Bank may make its own rules of conduct or procedure, not inconsistent with the provisions of this Act, for the good order and proper management of the Bank.

(5)

The Bank shall not be subject to the Companies Act (Cap. 486) or the Banking Act (Cap. 488).

5.
Head office and branches
(1)

The Bank shall have its head office in Nairobi but during a time of national emergency the Bank may, unless the President otherwise directs, establish its head office temporarily or permanently in any other place within Kenya or elsewhere.

(2)

The Bank may establish or close branches in any place within Kenya and may, with the prior approval of the Minister, open or close branches outside Kenya.

6.
Agents

The Bank may, with the prior approval of the Minister, appoint, on such terms as it considers appropriate, or cancel the appointment of, agents, both within and outside Kenya.

7.
Exemption from tax
(1)

The Bank shall not be liable to any taxation imposed by any law in respect of income or profits.

(2)

No duty shall be chargeable under the Stamp Duty Act (Cap. 480) in respect of any instrument executed by or on behalf of or in favour of the Bank in any case where, but for this exemption, the Bank would be liable to pay such duty.

(3)

The Minister may, whether for the purpose of removing any doubt as to the extent of the foregoing provisions of this section or for the purpose of extending the immunities of the Bank, by order published in the Gazette specify any tax, duty, fee, rate, levy, cess or other impost as one to which the Bank shall not be liable, and the law relating thereto shall have effect accordingly.

PART III – CAPITAL AND RESERVES
PART IV – MANAGEMENT
13C.
Qualifications for Governor and Deputy Governor
(1)

The Governor and Deputy Governors shall be fit and proper persons of recognized professional standing and over ten years' experience at senior management level in the field of economics, banking, finance, law or other fields relevant to the functions of the Central Bank.

(2)

For the purposes of this section, "fit and proper" means possessing all the attributes to be taken into account in determining the suitability of a person to be appointed as Governor, including the person's general probity, competence and soundness of judgment for the fulfillment of the responsibilities of office and the diligence with which the person is likely to fulfill those responsibilities.

[Act No. 36 of 2012, s. 5.]

16.
Remuneration
(1)

The Governor, the Deputy Governor, and any substitute appointed under section 11(4) of this Act shall be paid by the Bank such salaries and allowances as may be determined from time to time by the President, but such salaries and allowances shall not be altered to the detriment of any person during his term of office.

(2)

The directors and any substitute appointed under section 11(4) shall be paid by the Bank such allowances as may from time to time be determined by the President.

17.
Preservation of secrecy
(1)

Except for the purpose of the performance of his duties or the exercise of his powers, the Governor, the Deputy Governor, any Director or any other officer or employee of the Bank shall not disclose any information which he has acquired in the performance of his duties or the exercise of his powers.

(2)

Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable to a fine not exceeding two thousand shillings or to imprisonment for a term not exceeding one year, or to both in addition to any disciplinary action which may be taken by the Board.

18.
Declaration of interest

The Governor, the Deputy Governor, and any Director shall declare his interest in any specific proposal being considered or to be considered by the Board.

PART V – CURRENCY
19.
Currency of Kenya
(1)

The unit of currency of Kenya shall be the Kenya shilling, which shall be divided into one hundred cents.

(2)

Twenty shillings shall equal one Kenya pound.

21.
Use of Kenya shilling

All monetary obligations or transactions entered into or made in Kenya shall be deemed to be expressed and recorded, and shall be settled, in Kenya currency unless otherwise provided for by law or agreed upon between the parties.

23.
Spent.

24.
Exchange of mutilated notes and coins

The Bank shall not be obliged to exchange any note or coin which is mutilated, defaced, soiled or otherwise defective, and the conditions subject to which the Bank may as a matter of grace exchange any such note or coin shall be within the absolute discretion of the Bank.

PART VI – EXTERNAL RELATIONS
29.
Relations with foreign central banks, foreign banks and foreign financial institutions

The Bank may open accounts for and accept deposits from, collect money and other monetary claims for and on account of, foreign central banks, foreign banks and foreign financial institutions, and may generally act as banker to those banks or institutions.

32.
Fiscal agent for Government’s transactions with international financial institutions

The Bank shall be the fiscal agent for all of the Government’s transactions with international financial institutions of which Kenya is a member or with which Kenya is associated.

33.
Depository

The Bank shall act as depository for Kenya currency holdings owned by international financial institutions of which Kenya is a member or with which Kenya is associated.

PART VIA – REGULATIONS OF FOREIGN EXCHANGE DEALINGS
PART VIB – MORTGAGE FINANCING BUSINESS
33P.
Licensing
(1)

A person shall not engage in mortgage refinance business unless that person has been licensed by the Bank.

(2)

An application for a licence under in subsection (1) shall be made to the Bank in the prescribed form and accompanied by the prescribed fee.

(3)

A person who contravenes the provision of subsection (1) commits an offence.

[Act No. 10 of 2018, s. 68.]

33Q.
Powers of the Bank
(1)

The Bank shall have the following powers with respect to the regulation of mortgage refinance companies—

(a)

to license mortgage refinance companies;

(b)

to determine the capital adequacy standards and requirements for mortgage refinance companies;

(c)

to prescribe the minimum liquidity requirements and permissible investments for mortgage refinance companies;

(d)

to supervise mortgage refinance companies, including—

(i) conducting both on-site and off-site supervision;
(ii) assessing professional and moral suitability of persons managing or controlling the mortgage refinance companies;
(iii) approving the Board and management of the mortgage refinance companies;
(iv) approving the appointment of the external auditors;
(v) collecting regular data from mortgage refinance companies;
(vi) approving the annual audited accounts of mortgage refinance companies before publication and presentation at the annual general meetings;
(e)

to revoke or suspend a licence;

(f)

to direct or require such changes as the Bank may consider necessary; and

(g)

to take any other action as the Bank may consider necessary.

[Act No. 10 of 2018, s. 68.]