Nairobi — The Central Bank of Kenya (CBK) has transferred to the Government Consolidated Fund Sh4 billion as distribution from CBK’s General Reserve Fund (GRF) as at end FY2021/22, in a bid to increase its capital buffers.
Concurrently, this transfer saw CBK increase its paid-up capital from Sh35 billion to Sh38 billion.
The transfer (loosely known as “remitting of dividends”) and the capital increase followed approvals by the CBK Board.
In making its determination, the CBK Board also considered CBK’s financial needs with the objective of ensuring CBK is well-resourced to deliver on its mandate in the increasingly uncertain economic environment.
In particular, GRF resources are needed for Modernizing CBK’s facilities and infrastructure in keeping with its mandate and strengthening CBK’s financial position to make it more resilient to shocks.
“Increasing the paid-up capital will cushion CBK against possible shocks or impairment from deficits, which could undermine its financial sustainability. Best practice for central banks is that the capital buffers and surplus distribution procedures should enable the central bank to pursue its functions even in times of stress while sustaining its financial independence,” CBK said in a statement.
CBK needs to increase its paid-up capital in the period ahead towards its authorised capital of Sh50 billion.
The increased paid-up capital to Sh38 billion strengthens CBK’s financial position, specifically placing it in a position to better absorb losses that may arise from discharge of its functions; provide confidence that it will meet its domestic obligations; and cushion against shocks that may adversely affect its balance sheet.
The transfer was in accordance with Sections 9 and 51 of the CBK Act, relating to the treatment of CBK’s net annual surplus, and was executed by crediting the Ministry of Finance’s Deposit Account at CBK.
Read the original article on Capital FM.
AllAfrica publishes around 600 reports a day from more than 100 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.
AllAfrica is a voice of, by and about Africa – aggregating, producing and distributing 600 news and information items daily from over 100 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Johannesburg, Nairobi and Washington DC.
Get the latest in African news delivered straight to your inbox
By submitting above, you agree to our privacy policy.
Almost finished…
We need to confirm your email address.
To complete the process, please follow the instructions in the email we just sent you.
There was a problem processing your submission. Please try again later.
