The Central Bank of Kenya was established in 1966 through an Act of Parliament – the Central Bank of Kenya Act of 1966. The establishment of the Bank was a direct result of the desire among the three East African states to have independent monetary and financial policies.
This led to the collapse of the East Africa Currency Board (EACB) in mid 1960s.
Following the promulgation of the new constitution on August 27th, 2010, the Central Bank of Kenya (CBK) is now established under Article 231 of the Constitution, 2010. Under this Article the Central Bank has the responsibility of formulating monetary policy, promoting price stability, issuing currency and performing any other functions conferred on it by an Act of Parliament.
The Constitution guides that “the Central Bank shall not be under the direction or control of any person or authority in the exercise of its powers or performance of its functions”.
Head Office, Branches and Currency Centres
The Bank operates from its Head Office in Nairobi and has branch offices in Mombasa, Kisumu and Eldoret. The Bank also runs Currency Centres in Nyeri, Nakuru and Meru. The Bank also has a major stake in the Kenya School of Monetary Studies (KSMS) which is headed by an executive director answerable to the Governor.
Mandate and Objectives
Sections 4 and 4A of the CBK Act set out the Bank’s objects as follows:
- To formulate and implement Monetary policy directed to achieving and maintaining stability in the general level of prices.
- To foster the liquidity, solvency and proper functioning of a stable market-based financial system.
- Subject to subsections (1) and (2), the Bank shall support the economic policy of the Government, including its objectives for growth and employment.
Without prejudice to the generality of the above, other objects of the Bank are;
- To formulate and implement foreign exchange policy.
- To hold and manage its foreign exchange reserves. To license and supervise authorized dealers.
- To formulate and implement such policies as best promote the establishment, regulation and supervision of efficient and effective payment, clearing and settlement systems.
- To act as banker and adviser to, and as fiscal agent of the Government.
- To issue currency notes and coins.
The Board of Directors
Role and Legal Status
Under the Central Bank of Kenya Act (Cap. 491), the responsibility for determining the policy of the Bank, other than the formulation of monetary policy, is given to the Board of Directors. The Board of Directors of the Central Bank of Kenya are responsible for:
(a) Determining the policy of the Bank, other than the formulation of monetary policy;
(b) Determining the objectives of the Bank, including oversight for its financial management and strategy;
(c) Keeping under constant review the performance of the Bank in carrying out its functions;
(d) Keeping under constant review the performance of the Governor in discharging the responsibility of that office;
(e) Keeping under constant review the performance of the Governor in ensuring that the Bank achieves its Objectives;
(f) Determining whether the policy statements made are consistent with the Bank’s primary function and policy objectives of the Bank
(g) Keeping under constant review the use of Bank’s resources.
The Board comprises 11 members consisting of the Chairperson, the Governor; the Permanent Secretary to the National Treasury or his representative who shall be a non-voting member, and eight other non-executive directors.
The chairperson and directors are appointed by the President with the approval of Parliament and hold office for a period of four years but shall be eligible for re-appointment for one further term of four years. Persons eligible to be appointed to the Board must be citizens of Kenya who are knowledgeable or experienced in monetary, financial, banking and economic matters or other disciplines relevant to the functions of the Bank.
The Chairperson convenes the meetings of the Board not less than once in every two months, or whenever the business of the Bank so requires, or whenever he is so requested in writing by at least three directors. In the absence of the Chairperson at a meeting, the members present shall elect one of the members appointed under paragraph to preside at that meeting of the Board.
A quorum for any meeting of the Board shall be the Chairperson, the Governor and three directors. Decisions of the Board are adopted by a majority of the votes of those present at that meeting and in case of an equality of votes the Chairperson or the person presiding at the meeting shall have a second or casting vote. The Board may delegate to any committee of the Board or to any member thereof, or to any officer, employee or agent of the Bank the exercise of any of the powers or the performance of any of the functions or duties of the Board under the CBK Act or any other written law.
The Board of Management
The executive management team comprises the Governor, two Deputy Governors and heads of department. The Governor and Deputy Governors are appointed by the President through a transparent and competitive process and with the approval of Parliament. The Governor and Deputy Governors hold office for a term of four years, but are eligible for re-appointment for one further term of four years.
The Governor is the chief executive officer of the Bank and, subject to the general policy decisions of the Board, is responsible for the management of the Bank, including the organization, appointment and dismissal of the staff in accordance with the general terms and conditions of service established by the Board, the Governor has authority to incur expenditure for the Bank within the administrative budget approved by the Board.
Dr. Haron Sirima,
Kennedy Kaunda Abuga,
Mr. Gerald Arita Nyaoma
Ms Rose Alex Detho
Mr. Peter Rotich
Mr. Mark L. Lesiit
Mr. William Nyagaka
Charles Gitari Koori
Eng. Erastus Mwongera Miriti Acting Director, Department of Procurement & Logistics Services,
John K. Birech
Paul K. Wanyagi
Prof. Kinandu Muragu (PhD)
You can reach the Regulator’s Head office through the following Contacts:
Haile Selassie Avenue,
P.O Box 60000-00200,