Kenyan Acts and Sections — Page 227

Section 29 of Public Trustee Act CAP 168: Alternative dispute resolution

The Public Trustee may apply alternative forms of dispute resolution mechanisms to resolve disputes relating to the administration of estates and trusts.

Section 1 of The Banking Act CAP 488: Short title

This Act may be cited as the Banking Act.

Section 2 of The Banking Act CAP 488: Interpretation

(1) In this Act, unless the context otherwise requires— "agency" means an entity contracted by an institution and approved by the Central Bank or subcontracted by such entity to provide the services of the institution on behalf of the institution, in such manner as may be prescribed by the Central B…

Section 3 of The Banking Act CAP 488: Restrictions on carrying on banking business, etc.

(1) No person shall in Kenya— (a) transact any banking business or financial business or the business of a mortgage finance company unless it is an institution or a duly approved agency conducting banking business on behalf of an institution which holds a valid licence; (b) unless it is a bank and h…

Section 4 of The Banking Act CAP 488: Application for licence

(1) Every institution intending to transact banking business, financial business or the business of a mortgage finance company in Kenya shall, before commencing such business, apply in writing to the Central Bank for a licence. (2) Deleted by Act No. 9 of 2006, s. 4(b). (3) The Central Bank shall, w…

Section 5 of The Banking Act CAP 488: Licensing of institutions

(1) Subject to section 4, the Central Bank may, upon payment of the prescribed fee, grant a licence to an institution to carry on business. (2) The Central Bank may endorse on a licence granted under this section such conditions as the Central Bank considers necessary and may from time to time add,…

Section 6 of The Banking Act CAP 488: Revocation of licence

(1) The Central Bank may, by notice in writing to the institution, revoke a licence if the institution— (a) ceases to carry on business in Kenya or goes into liquidation or is wound up or is otherwise dissolved; or (b) fails to comply with this Act, the Central Bank of Kenya Act (Cap. 491), or any r…

Section 7 of The Banking Act CAP 488: Minimum capital requirements

(1) A licence shall not be granted to an institution unless the institution meets the minimum capital requirements specified in the Second Schedule. (2) The Cabinet Secretary may, by order published in the Gazette, amend the Second Schedule. (3) Every order made under subsection (2) shall be laid be…

Section 8 of The Banking Act CAP 488: Location of places of business

(1) No institution shall open in Kenya a branch or a new place of business or change the location of a branch or an existing place of business in Kenya without the approval of the Central Bank. (2) Before granting an approval under subsection (1), the Central Bank may require to be satisfied as to —…

Section 8A of The Banking Act CAP 488: Branches and subsidiaries

(1) No institution shall open a branch or establish a subsidiary outside Kenya, except with the prior approval of the Cabinet Secretary. (2) An institution seeking approval under subsection (1) shall apply, in writing, to the Cabinet Secretary through the Central Bank. (3) Before granting approval u…

Section 9 of The Banking Act CAP 488: Amalgamations and transfers of assets and liabilities

(1) No amalgamation or arrangement which involves an institution as one of the principal parties to the relevant transaction, and no arrangement for the transfer of all or any part of the assets and liabilities of an institution to another person, shall have legal force except with the prior written…

Section 9A of The Banking Act CAP 488: Directors, Chief Executive Officers and significant shareholders to be fit and proper persons

(1) An institution shall ensure that no person is appointed or elected as a director or appointed as a senior officer unless the Central Bank has certified the person as a fit and proper person to manage or control the institution. (2) A person shall ensure that the person does not become a signific…

Section 10 of The Banking Act CAP 488: Limit on advances, credits and guarantees

(1) An institution shall not in Kenya grant to any person or permit to be outstanding any advance or credit facility or give any financial guarantee or incur any other liability on behalf of any person, so that the total value of the advances, credit facilities, financial guarantees and other liabil…

Section 11 of The Banking Act CAP 488: Restrictions on advances, credits and guarantees

(1) An institution shall not in Kenya— (a) grant or permit to be outstanding any advance or credit facility against the security of its own shares; or (b) grant or permit to be outstanding any advance or credit facility or give any financial guarantee or incur any other liability to, or in favour of…

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 t…

Section 13 of The Banking Act CAP 488: Restrictions on ownership of share capital of an institution

(1) No person other than— (a) another institution; (b) the Government of Kenya or the Government of a foreign sovereign State; (c) a State corporation within the meaning of the State Corporations Act (Cap. 446); (d) a foreign company which is licensed to carry on the business of an institution in it…

Section 14 of The Banking Act CAP 488: 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 exceeds forty percent of the amount of its total deposit liabilities. (2) The Central Bank may authoriz…

Section 15 of The Banking Act CAP 488: 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; and (b) the repayment of which, with interest and other charges, is secured by first mortgage or charge…

Section 16 of The Banking Act CAP 488: 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 deposits in the course of carrying on a deposit-taking business. (2) For the purposes of this sectio…

Section 16A of The Banking Act CAP 488: 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 return in the case of an institution carrying out business in accordance with Islamic law to that account…

Section 17 of The Banking Act CAP 488: 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 of The Banking Act CAP 488: 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 assets (including their total loans and advances) and risk-weighted off balance sheet items on the ot…

Section 19 of The Banking Act CAP 488: 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 the following— (a) notes and coins which are legal tender in Kenya; (b) balances held at the Central B…

Section 20 of The Banking Act CAP 488: 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 expenses, share-selling commission, brokerage, amount of losses incurred and items of expenditure not…

Section 20A of The Banking Act CAP 488: 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 prescribed in this section, the institution shall, within twelve months of the commencement of this section…

Section 21 of The Banking Act CAP 488: 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 Bank may, at any time, issue directions to an institution requiring it to maintain such books, record…

Section 22 of The Banking Act CAP 488: 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 conformity with the minimum financial disclosure requirements prescribed from time to time by the Central Bank…

Section 23 of The Banking Act CAP 488: 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 audited profit and loss account covering its activities in Kenya together with a copy of the auditor’s r…

Section 24 of The Banking Act CAP 488: 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 auditor appointed under subsection (1) shall audit and report on the annual balance sheet and profit and l…

Section 25 of The Banking Act CAP 488: 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 Bank if he— (a) resigns from office; (b) does not seek to be re-appointed; or (c) includes in his repo…

Acts and laws in Kenya

Provisions