The Central Bank Of Kenya Act 2014 PDF

The Central Bank of Kenya Act, enacted in 2014, is a comprehensive legislation that governs the establishment, objectives, functions, and operations of the Central Bank of Kenya (CBK). The Act aims to enhance the autonomy, accountability, and effectiveness of the CBK in carrying out its mandate as the country's monetary authority and regulator of the financial system. The primary objectives of the Act are: 1. To establish the Central Bank of Kenya as an autonomous entity responsible for formulating and implementing monetary policy. 2. To define the CBK's functions and powers in promoting price stability, financial system stability, and economic growth. 3. To provide for the governance structure, composition, and appointment processes of the CBK's Board and senior management. 4. To outline the CBK's role in regulating and supervising banks and other financial institutions. 5. To ensure the CBK's accountability and transparency through reporting and auditing mechanisms. The Act grants the CBK operational autonomy in formulating and implementing monetary policy, with the primary objective of maintaining price stability. It establishes the Monetary Policy Committee (MPC), which is responsible for setting the Central Bank Rate and other monetary policy instruments to achieve the inflation target set by the government. Furthermore, the Act outlines the CBK's functions in promoting financial system stability, including the regulation and supervision of banks, non-bank financial institutions, and payment systems. It provides the CBK with powers to license, inspect, and take corrective actions against regulated entities to ensure their safety and soundness. The Act establishes the governance structure of the CBK, including the Board of Directors, which is responsible for overseeing the Bank's operations and ensuring its accountability. The Board comprises the Governor, Deputy Governors, and non-executive members appointed by the President, with the approval of the National Assembly. Additionally, the Act addresses the CBK's role in managing foreign exchange reserves, providing banking services to the government, and acting as a lender of last resort to financial institutions in times of liquidity stress. It also outlines the Bank's responsibilities in issuing currency, maintaining the integrity of the national payment system, and overseeing anti-money laundering and counter-terrorism financing measures. To ensure transparency and accountability, the Act requires the CBK to publish regular reports on its activities, including an annual report and financial statements audited by an independent external auditor. It also establishes mechanisms for parliamentary oversight and public consultations on the Bank's policies and operations. Overall, the Central Bank of Kenya Act 2014 is a comprehensive legal framework that aims to strengthen the CBK's autonomy, enhance its effectiveness in achieving its objectives, and promote the stability and resilience of the Kenyan financial system.