CBK shuts door on bailouts for failing banks
The Central Bank of Kenya (Amendment) Act, 2026, has been signed into law, establishing a formal framework for Emergency Liquidity Assistance (ELA). The law mandates that only solvent and commercially viable banks can receive emergency funding, aiming to protect public resources.
Why it matters
This reform aligns Kenya's banking sector with international financial stability standards and reduces the risk of taxpayer-funded bailouts for failing institutions.
The Central Bank of Kenya (Amendment) Act, 2026, which received presidential assent into law on Monday, introduces a formal framework governing Emergency Liquidity Assistance (ELA). /FILE Banks seeking emergency financial support from the Central Bank of Kenya (CBK) will have to prove they are fundamentally sound before receiving any rescue funding under new law.
The report provides a factual summary of legislative changes and their intended regulatory impact.
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