Section 12 of The Banking Act CAP 488: Restriction on trading and investments

An institution shall not—
(a) engage, alone or with others, in wholesale or retail trade, including the import or export trade, except in the course of the satisfaction of debts due to it; and any trading interest carried on by an institution at the commencement of this Act shall be disposed of by the institution within such time
as the Central Bank may allow;
(b) acquire or hold, directly or indirectly, any part of the share capital of, or otherwise have a beneficial interest in, any financial, commercial, agricultural, industrial or other undertaking where the value of the institution’s interest would exceed in the aggregate twenty-five per cent of the core capital of
that institution:
Provided that—
(i) an institution may take an interest in such an undertaking in satisfaction of a debt due to it but, if it does so, it shall dispose of the interest within such time as the Central Bank may allow;
(ii) a shareholding in any corporation established for the purpose of promoting development on Kenya and approved by the Cabinet Secretary; or in a foreign company which is licensed to carry on the business of the institution in its country of incorporation and approved by the Central Bank;
(iii) approval granted by the Central Bank shall be subject to such conditions as the Central Bank may deem appropriate;
(c) purchase or acquire or hold any land or any interest or right therein except such land or interest as may be reasonably necessary for the purpose of conducting its business or for housing or providing amenities for its staff, where the total amount of such investment does not exceed such proportion
of its core capital as the Central Bank may prescribe:
Provided that—
(i) this paragraph does not prevent an institution from—
(A) letting part of any building which is used for the purpose of conducting its business;
or
(B) securing a debt on land and, in the event of default in payment of the debt, holding the land for so long as, in the opinion of the Central Bank, is needed for the realization of the debt; or
(C) acquiring land for the purpose of its own development; and
(ii) an institution that had purchased or acquired land or any interest or right therein prior to the commencement of this paragraph, shall endeavour to bring its holding or interest in that land within the prescribed limits as soon as reasonably practicable after such commencement, and in any event, not later than the 31st December, 2010.

More Sections

Section 13 - Restrictions on ownership of share capital of an institution

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Section 14 - Restrictions on advances for purchase of land

(1) No institution, other than a mortgage finance company, shall make loans or advances for the purchase, improvement or alteration of land, so that the aggregate amount of those loans or advances...

Section 15 - Mortgage finance companies

(1) A mortgage finance company shall make loans— (a) for the purpose of the acquisition, construction, improvement, development, alteration or adaptation for a particular purpose of land in Kenya;...

Section 16 - Restrictions on deposit-taking

(1) Subject to this section, no person, other than an institution which holds a valid licence or a duly approved agency conducting banking business on behalf of an institution, shall invite or accept...

Section 16A - Imposition of charges and payment of interest

(1) No institution shall impose any form of charges on a savings, seven day call or fixed deposits account. (2) An institution shall, in respect of a savings account, pay interest accruing or a...

Section 17 - Ratio between core capital and deposits

The core capital of an institution shall at all times be not less than eight per cent of its total deposit liabilities.

Section 18 - Ratio between capital and assets

(1) The Central Bank may prescribe the minimum ratios which shall be maintained by institutions and banking groups as between their core capital and total capital on one hand and their risk-weighted...

Section 19 - Minimum liquid assets

(1) An institution shall maintain such minimum holding of liquid assets as the Central Bank may from time to time determine. (2) For the purpose of this section, "liquid assets" means all or any of...

Section 20 - Restrictions on dividends

(1) No institution incorporated in Kenya shall pay any dividend on its shares or make any other form of distribution to its shareholders until all its capitalized expenditure (including preliminary...

Section 20A - Financial year

(1) The financial year of every institution shall be the period of twelve months ending on the 31st December in each year. (2) Where the financial year of an institution is different from that...

Section 21 - Form of accounts

(1) All entries in any books and all accounts kept by an institution shall be recorded and kept in the English language, using the system of numerals employed in Government accounts. (2) The Central...

Section 22 - Accounts to be exhibited

(1) Every institution shall— (a) exhibit throughout the year in a conspicuous position in every office and branch in Kenya’ a copy of its last audited financial statements which shall be in...

Section 23 - Submission of accounts to the Central Bank

(1) An institution shall, not later than three months after the end of its financial year, submit to the Central Bank an audited balance sheet, showing its assets and liabilities in Kenya, and an...

Section 24 - Appointment of auditors

(1) Subject to subsection (7), every institution shall appoint annually an auditor (within the meaning of section 3(1) of the Companies Act (Cap. 486)) and approved by the Central Bank. (1A) An...

Section 25 - Change of auditors to be notified to the Central Bank

(1) No institution shall remove or change its auditor except with the prior written approval of the Central Bank. (2) An auditor of an institution shall forthwith give written notice to the Central...

Section 26 - Auditor’s duty of confidence

(1) No duty to which an auditor of an institution may be subject shall be regarded as contravened by reason of his communicating in good faith to the Central Bank, whether or not in response to a...

Section 27 - Collection of information by Central Bank

The Central Bank shall collect such date and other information as may be necessary to enable it to maintain supervision and surveillance of the affairs of institutions or their duly authorised...

Section 28 - Furnishing of information

(1) The Central Bank may require any institution and their agencies to furnish to it, at such time and in such manner as it may direct, such information as the Central Bank may reasonably require for...

Section 29 - Cabinet Secretary may require further information

The Cabinet Secretary may require the Central Bank or an institution to furnish to him, at such time and in such manner as he may direct, such information as the Cabinet Secretary may require.

Section 30 - Time to furnish information

Where the Central Bank or an institution is required to furnish information under this Part, it shall furnish that information and any supplemental material that may be required as a result of that...

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