President William Ruto has signed the Central Bank of Kenya (Amendment) Bill, 2026 into law, introducing a major shift in how top officials at the Central Bank are appointed. The new law requires all Deputy Governor nominees at the Central Bank of Kenya to be vetted and approved by the National Assembly before taking office.

The change means Parliament now holds direct approval power over senior leadership at the Central Bank of Kenya, a role previously seen as largely controlled by the executive. The move aligns the appointment process for Deputy Governors with that of the Governor and strengthens parliamentary oversight of monetary policy leadership.

“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 statement reads.

“The new law introduces a distinct legal framework separating the Central Bank’s routine monetary policy operations from Emergency Liquidity Assistance (ELA). The move will improve Kenya’s preparedness to respond to financial crises while protecting taxpayers and the banking sector.”

“Under the amendment, ELA can only be extended to banks that meet strict conditions on solvency, viability, and systemic risk. The provision aims to separate ordinary liquidity management from extraordinary interventions during periods of financial distress.”

“One of the key reforms elevates financial system stability and sound banking regulation as secondary objectives of the Central Bank, while retaining price stability as its primary mandate. The law formally recognises the CBK’s role in promoting the integrity, resilience, and proper functioning of Kenya’s financial system.”

“Additionally, to enhance governance, nominees for Deputy Governor positions will now be vetted and approved by the National Assembly before appointment. The provision aligns their process with that of the Governor and reinforces parliamentary oversight of senior leadership at the monetary authority.”

In a post on Monday, July 6, 2026, William Ruto said the reforms are meant to “enhance governance” and reinforce parliamentary oversight of senior officials at the monetary authority.

Under the new law, nominees will appear before MPs for questioning and must secure approval before appointment. the change shifts influence over the Central Bank further into the political arena, raising concerns about independence at a key financial institution.

The law amends the framework governing the Central Bank of Kenya and introduces wider reforms on how it responds to financial stress. It separates routine monetary policy operations from Emergency Liquidity Assistance (ELA), which will now only be granted to banks that meet strict conditions on solvency, viability and systemic risk.

The amendment also retains price stability as the Central Bank’s main objective but adds financial system stability and sound banking regulation as secondary goals. It further gives statutory backing to the CBK Institute of Monetary Studies and expands cooperation with regional and international institutions.

“The amendment also gives statutory backing to the CBK’s training mandate through the Central Bank of Kenya Institute of Monetary Studies. It also provides a legal framework for collaboration with national, regional, and international institutions to enhance knowledge sharing and cross-border cooperation,” the statement reads.

“The law further updates various provisions by replacing references to the defunct Deposit Protection Fund Board with the Kenya Deposit Insurance Corporation, bringing the Act in line with the current deposit protection framework.”

“It also expands legal clarity on CBK’s authority to deal in gold and other precious metals as part of reserve management. This will support growth of Kenya’s mining sector and aligns Kenya with practices in Tanzania, Ghana, and South Africa.”

Parliament gains oversight role

On the same day, Ruto also assented to the Parliamentary Pensions (Amendment) Bill, 2023, which aligns pension laws with the Constitution and extends benefits to senators under the same terms as Members of the National Assembly.

The pensions law also redefines a child as a person under 18 years, reconstitutes key pension committees to reflect Kenya’s bicameral Parliament, and maintains gratuity payments only for legislators who serve less than five years.

“Also signed into law the Parliamentary Pensions (Amendment) Bill, 2023, bringing in reforms that align the parliamentary pension framework with the Constitution and extend benefits to both Members of the National Assembly and the Senate,” the statement reads.

“The legislation updates the Parliamentary Pensions Act of 1983, which became outdated after the promulgation of the 2010 Constitution established a bicameral Parliament. The new law formally recognises both the National Assembly and the Senate in the administration of parliamentary pensions and ensures senators are entitled to benefits under the same framework as MPs.”

“Among the major reforms, the law redefines “child” to mean a person below 18 years, up from 16 years, to conform with the Constitution.”