The Central Bank of Kenya (CBK) has flagged seven commercial banks for failing to meet the minimum core capital requirement of Sh3 billion.
In its latest Bank Supervision Annual Report, the regulator said the seven lenders were in violation of Section 7(1) of the Banking Act, which sets the minimum core capital requirement at Sh3 billion, up from the previous threshold of Sh1 billion.
“Seven commercial banks were in violation of Section 7(1) of the Banking Act due to failure to maintain the minimum core capital required of Ksh.3 billion,” CBK said.
The regulator is progressively raising the minimum core capital requirement, with the threshold eventually expected to reach Sh10 billion.
CBK said the increase would be implemented in phases to give banks time to strengthen their capital positions.
The report also found that five commercial banks were in violation of Section 18 of the Banking Act and the CBK Prudential Guideline on Capital Adequacy.
Four banks failed to meet the required 10.5 per cent core capital to total risk-weighted assets ratio, while three banks did not meet the eight per cent core capital to total deposits ratio.
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