CBK flags seven banks for failing to meet Sh3bn core capital requirement
In its latest Bank Supervision Annual Report, CBK said the seven lenders were in breach of Section 7(1) of the Banking Act, which sets the minimum core capital requirement at Sh3 billion, up from Sh1 billion previously.
In a latest Bank Supervision Annual Report, the Central Bank of Kenya (CBK) has identified seven commercial banks for failing to meet the mandated minimum core capital requirement of Sh3 billion. This regulation, outlined in Section 7(1) of the Banking Act, has been increased from the previous threshold of Sh1 billion. According to CBK, these seven lenders were in breach of the law due to their inability to maintain the stipulated minimum core capital of Ksh.3 billion.
The regulator is on a trajectory to gradually escalate the minimum core capital requirement, with the eventual goal of reaching Sh10 billion. This phased implementation aims to ensure a steady and manageable increase for the banks. Additionally, the CBK revealed that five commercial banks were also found to be in violation of Section 18 of the Banking Act and the bank's own Prudential Guideline on Capital Adequacy.
Four of the banks failed to meet the core capital to total risk-weighted assets ratio of 10.5 percent, while three were unable to maintain the core capital to total deposits ratio of eight percent.
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