National Payment System Act
2. Interpretation
2. Interpretation
In this Act, unless the context otherwise requires—"bank" has the meaning assigned to it in the Banking Act (Cap. 488);“beneficial owner" has the meaning assigned to it under the Companies Act (Cap. 486);"business day"me ans any day, other than a Sunday, a public holiday declared in accordance with the Public Holidays Act (Cap. 110), a day declared to be a bank holiday under the Banking Act (Cap. 488), or a day declared to be a bank holiday under the Microfinance Act (Cap. 493C), on which the institutions and the Central Bank are open to the public for carrying on business functions;"Cabinet Secretary" means the Cabinet Secretary for the time being responsible for matters relating to finance;"Central Bank" means the Central Bank of Kenya established under the Central Bank of Kenya Act (Cap. 491);"Central Bank of Kenya settlement system" means a settlement system established and operated by, or under the control of, the Central Bank;"Central Bank of Kenya settlement system participant" means—(a)the Central Bank;(b)a bank, an institution or a branch of a foreign institution; or(c)a designated payment system operator, that participates in the Central Bank of Kenya settlement system."clear" means the exchange of payment instructions, and "clearing" shall be construed accordingly;"clearing, netting and settlement agreements" means written agreements with regard to clearing, netting or settlement concluded between the Central Bank of Kenya settlement system participants or settlement system participants;"designated payment instrument" means a payment instrument designated in accordance with section 6;"designated payment system" means a payment system designated in accordance with section 3;"designated payment system operator" means an operator of a designated payment system;"designated payment system participant" means a person who is—(a)a participant in a designated payment system; or(b)a designated payment system operator;"failure to settle" means the inability of a settlement system participant to meet its settlement obligations in a clearing house;"institution" means a bank, mortgage finance company or a financial institution as defined in the Banking Act (Cap. 488) or a microfinance bank business as defined in the Microfinance Act (Cap. 493C) or any other body which the Cabinet Secretary may, in consultation with the Central Bank, declare, by notice in the Gazette, to be an institution for the purposes of this Act;"netting" means the determination of the net payment obligations between two or more settlement system participants within a payment clearing house or the determination of the net settlement obligations between two or more settlement system participants within a settlement system;"payment clearing house" means an arrangement between two or more Central Bank settlement system participants, excluding a designated payment system operator, governing the clearing of payment instructions between those Central Bank settlement system participants;"payment clearing house system operator" means a person, other than a designated payment system operator, who clears on behalf of any two or more Central Bank settlement system participants;"payment instrument" means any instrument, whether tangible or intangible, that enables a person to obtain money, goods or services, or to otherwise make payment;"payment instruction" means an instruction to a settlement system participant to transfer funds or make a payment;"payment obligation" means an indebtedness that is owed by one settlement system participant to another as a result of the clearing of one or more payment instructions;"payment service provider" means—(i)a person, company or organisation acting as provider in relation to sending, receiving, storing or processing of payments or the provision of other services in relation to payment services through any electronic system;(ii)a person, company or organisation which owns, possesses, operates, manages or controls a public switched network for the provision of payment services; or(iii)any other person, company or organization that processes or stores data on behalf of such payment service providers or users of such payment services;"payment system" means a system or arrangement that enables payments to be effected between a payer and a beneficiary, or facilitates the circulation of money, and includes any instruments and procedures that relate to the system;"payment system management body" means a body recognized by the Central Bank in accordance with section 7;"person" includes any legal entity including a trust;"reporting institution" has the meaning assigned to it under section 2 of the Proceeds of Crime and Anti-Money Laundering Act (Cap. 59A);"settlement" means discharge of settlement obligations;"settlement instruction" means an instruction given to a settlement system by a settlement system participant or by a payment clearing house system operator on behalf of a Central Bank settlement system participant to effect settlement of one or more payment obligations, or to discharge any other obligation of one system participant to another system participant;"settlement obligation" means an indebtedness that is owed by one settlement system participant to another as a result of one or more settlement instructions;“significant shareholder” has the meaning assigned to it under the Banking Act (Cap. 488);"system operator" means a person, other than a designated payment system operator, authorized in terms of section 8(2)(c) to provide services to any two or more persons in respect of payment instructions;"settlement system" means a system established and operated by the Central Bank for the discharge of payment or settlement obligations, or the discharge of payment and settlement obligations, between system participants in that system;"settlement system participant" means—(a)a Central Bank of Kenya settlement system participant; or(b)a designated payment system participant; and"systemic risk" means the risk that failure of one or more settlement system participants, for whatever reason, to meet their payment obligations or their settlement obligations may result in any or all of the other settlement system participants being unable to meet their respective payment or settlement obligations.[Act No. 41 of 2013, Sch, Act No. 19 of 2015, s. 167, Act No. 20 of 2025,2nd Sch.]Source: Kenya Law