NAIROBI— President William Ruto has assented to two significant pieces of legislation that promise to reshape Kenya’s financial architecture and parliamentary benefits framework. The Central Bank of Kenya (Amendment) Bill, 2026, and the Parliamentary Pensions (Amendment) Bill, 2023, were signed into law, marking major strides in institutional strengthening and constitutional alignment.
The Central Bank of Kenya (Amendment) Bill introduces sweeping reforms designed to bolster the CBK’s ability to maintain financial stability, enhance banking supervision, and modernise monetary policy tools. A cornerstone of the new law is the establishment of a clear legal separation between the bank’s routine monetary policy operations and Emergency Liquidity Assistance (ELA). This distinction is expected to sharpen Kenya’s crisis-response capabilities while safeguarding taxpayers and the broader banking sector from undue risk.
Under the amended Act, ELA may only be extended to solvent, viable institutions posing genuine systemic threats, ensuring that extraordinary support is reserved strictly for genuine distress situations. The legislation also elevates financial system stability and sound banking regulation as explicit secondary objectives of the Central Bank, alongside its primary mandate of price stability. This formal recognition underscores the CBK’s critical role in safeguarding the integrity and resilience of Kenya’s financial system.
In a move to strengthen governance, nominees for the positions of Deputy Governor will now undergo vetting and approval by the National Assembly, mirroring the process for the Governor and enhancing parliamentary oversight. The law further grants statutory backing to the Central Bank of Kenya Institute of Monetary Studies, formalising its training mandate, and creates a framework for deeper collaboration with national, regional, and international partners to promote knowledge exchange and cross-border cooperation.
Assented the Central Bank of Kenya (Amendment) Bill, 2026, ushering in sweeping reforms aimed at strengthening the CBK’s capacity to safeguard financial stability, improve banking oversight, and modernise the country’s monetary policy framework.
The new law introduces a distinct… pic.twitter.com/N8kG94ANbY
— William Samoei Ruto, PhD (@WilliamsRuto) July 6, 2026
Additional provisions update references to the now-defunct Deposit Protection Fund Board with the Kenya Deposit Insurance Corporation, and explicitly authorise the CBK to deal in gold and other precious metals as part of its reserve management strategy. This change is anticipated to support Kenya’s emerging mining sector and bring the country in line with regional peers such as Tanzania, Ghana, and South Africa.
Separately, President Ruto signed the Parliamentary Pensions (Amendment) Bill, 2023, which modernises the outdated 1983 Parliamentary Pensions Act to reflect Kenya’s bicameral legislature under the 2010 Constitution. The new law formally recognises both the National Assembly and the Senate, extending equivalent pension benefits to senators and MPs alike.
Key changes include redefining a “child” as a person below 18 years—up from 16—to conform with constitutional standards, and reconstituting the Parliamentary Pensions Management Committee and Appeals Committee to ensure representation from both houses. To protect public service pension principles, the legislation retains gratuity payments only for legislators serving less than five years.
These twin enactments signal the government’s commitment to robust financial governance and constitutional fidelity. Analysts say the CBK reforms could significantly improve crisis preparedness and investor confidence, while the pension updates promote equity and modernisation within Parliament.
