Three Kenyan banks have yet to meet the minimum core capital requirement of Ksh3 billion, with the Central Bank of Kenya (CBK) ruling out any grace period for lenders that remain below the threshold.
While responding to a question from The Kenya Times during a Monetary Policy Committee (MPC) briefing on Wednesday, June 10, CBK Governor Kamau Thugge said banks that have not met the minimum capital requirement are expected to raise additional funds from their shareholders.
He added that the government, through the National Treasury, is expected to support one of the affected institutions.
Thugge disclosed that three lenders remain below the minimum core capital requirement of Ksh3 billion.
CBK Says 3 Banks Yet to Meet Ksh3 Billion Capital Rule, Rules Out Grace Period
The governor indicated that no extension would be granted to institutions that have failed to comply, emphasizing that affected banks must conclude ongoing capital-raising efforts.
“At the moment, we have not offered any grace periods for banks to meet the core capital requirement of Ksh3 billion. Some banks have already met the requirement. There are a few banks, about three, that are yet to meet,” he said.
“Others are in the process of raising additional capital from shareholders to comply. We have also had indications of support from the National Treasury in the case of one of the banks. So there is no grace period.”
Thugge said banks are now expected to meet the Ksh5 billion capital requirement this year.
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He added that the regulator is engaging all lenders below the threshold to understand their plans for complying with the requirement.
The banks include Development Bank of Kenya, which reported core capital of KSh2.16 billion as of December 2025; Credit Bank, at KSh1.36 billion as of March 2026; and Consolidated Bank, which recorded a negative core capital position of KSh546 million as of December 2025.
The Government plans to inject Ksh1.125B into Consolidated Bank to shore up its capital, according to budget estimates for the coming financial year.
Understanding Core Capital and Banking Stability
Core capital is the strongest and most reliable financial foundation of a bank, acting as a safety net that protects both the institution and depositors in times of financial stress or losses. It mainly consists of shareholders’ funds and retained earnings—profits that the bank keeps instead of distributing as dividends.
In Kenya, the Central Bank of Kenya (CBK) requires banks to maintain a minimum level of core capital to ensure stability and resilience in the financial sector.
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To strengthen banks, improve their ability to withstand risks such as bad loans, cyber threats, and economic shocks, and support larger lending capacity, CBK introduced new capital requirements in late 2024 through the Business Laws (Amendment) Act, 2024.
The reforms raised the minimum core capital threshold from KSh1 billion, a level that had remained unchanged since 2012, and introduced a phased increase.
Under the implementation schedule, banks are required to meet progressively higher thresholds as follows:
- By end of 2025: minimum Ksh3 billion
- By end of 2026: minimum Kh5 billion
- By end of 2027: minimum Ksh6 billion
- By end of 2028: minimum Ksh8 billion
- By end of 2029: full minimum Ksh10 billion for all commercial banks
