ADVOKS GLOBAL · KENYA
The Banking (Penalties) Regulations, 2025
27. Unscured or not fully secured advances
Edition: 2025-07-09 · In force
27. Unscured or not fully secured advances
(1)An institution which, in Kenya, grants an advance, loan or credit facility, that is unsecured or not fully secured, to—(b)a significant shareholder;(c)an associate of an officer;(d)an associate of a significant shareholder;(e)a person of whom an officer or significant shareholder of the institution has an interest in as an agent, director, manager or shareholder; or(f)a person of whom an officer or significant shareholder of the institution is a guarantor,commits a violation and is liable, upon assessment, to a penalty not exceeding twenty million shillings or three times the gross amount of the monetary gain made or loss avoided by the institution.(2)An officer of an institution found liable for the violation in paragraph (1), commits a violation and is liable, upon assessment, to a penalty not exceeding one million shillings.(3)An institution found liable for the violation in paragraph (1) and continues to commit the violation in paragraph (1), commits a violation and is liable, upon assessment, to a penalty not exceeding one hundred thousand shillings for each day, or part of each day, that the institution continues to commit the violation in paragraph (1).(4)An officer—(a)of an institution found liable for the violation in paragraph (3); and(b)found liable for the violation in paragraph (2),commits a violation and is liable, upon assessment, to a penalty not exceeding one hundred thousand shillings for each day, or part of each day, that the institution continues to commit the violation in paragraph (1).(5)An institution which, in Kenya, permits to be outstanding an advance, loan or credit facility, that is unsecured or not fully secured to—(b)a significant shareholder;(c)an associate of an officer;(d)an associate of a significant shareholder;(e)a person of whom an officer or significant shareholder of the institution has an interest in as an agent, director, manager or shareholder; or(f)a person of whom an officer or significant shareholder of the institution is a guarantor,commits a violation and is liable, upon assessment, to a penalty not exceeding twenty million shillings or three times the gross amount of the monetary gain made or loss avoided, by the institution.(6)An officer of an institution found liable for the violation in paragraph (5), commits a violation and is liable, upon assessment, to a penalty not exceeding one million shillings.(7)An institution found liable for the violation in paragraph (5) and continues to commit the violation in paragraph (5), commits a violation and is liable, upon assessment, to a penalty not exceeding one hundred thousand shillings for each day, or part of each day, that the institution continues to commit the violation in paragraph (5).(8)An officer—(a)of an institution found liable for the violation in paragraph (7); and(b)found liable for the violation in paragraph (6),commits a violation and is liable, upon assessment, to a penalty not exceeding one hundred thousand shillings for each day, or part of each day, that the institution continues to commit the violation in paragraph (5).