ADVOKS GLOBAL · KENYA
Central Bank of Kenya Act
38. Reserve requirement
Edition: 2026-07-24 · In force
38. Reserve requirement
(1)The Bank may from time to time require institutions to maintain minimum cash balances on deposit with the Bank as reserves against their deposit and other liabilities.(2)The Bank may specify ratios for different types of liabilities and may further specify the method of computing the amount of the total liabilities of an institution but the ratios specified shall be the same for all institutions:Provided that nothing in this subsection shall be construed to prevent the Bank from allowing an institution or group of institutions upon which the provisions of subsection (1) are applied for the first time, a period within which to comply with the cash reserve ratio requirements as may be prescribed by the Bank.(3)Any specification of, or increase in the minimum reserve requirements under subsection (1) or subsection (2) shall take effect only after the expiration of thirty days’ notice to the institution of the Bank’s intention to take action.(4)The Bank may impose on any institution which fails to maintain the sufficient minimum cash balances required under this section, a penalty charge not exceeding one percent per day on the amount of the deficiency or ten thousand shillings, whichever is the higher for each day for which the deficiency continues.(5)The Bank may, if in its opinion circumstances of an unusual nature render it desirable so to do, pay a return and subject to such qualifications as it may determine on minimum cash balances deposited with the Bank under this section.(6)For the purposes of this section, "institution" includes—(c)any other person or body of persons which the Cabinet Secretary, on the recommendation of the Bank may by notice in the Gazette prescribe.