CBK warns banks facing capital shortfalls

Nairobi, Kenya - The Central Bank of Kenya (CBK) has announced it will summon commercial banks to discuss their plans for meeting minimum capital requirements. Governor Kamau Thugge stated that some banks have already been called in to explain their strategies, while others facing potential difficulties will be required to outline their next steps. The KSh5 billion target, part of a phased increase in minimum core capital, is now extended to December 2032, as per the Finance Act 2026.

Thugge highlighted the need for stronger banks in the face of economic shocks, such as climate change and cyber security attacks on financial institutions. He emphasized the importance of robust banks capable of lending and defending themselves against potential systemic impacts. The CBK is also investigating the potential of artificial intelligence agents in banking operations but will proceed cautiously due to the associated risks.

CBK Director of Research Robert Mudida noted that agentic AI could automate tasks like payments but warned of the technology's potential to make critical decisions previously made by humans. Human oversight will remain crucial to address data security and proper governance concerns. The CBK is exploring over 300 AI use cases to enhance its operations, including testing an AI-powered chatbot and employing AI for microforecasting and nowcasting to provide the Monetary Policy Committee with near-real-time economic insights.