Treasury and CBK split over Sh10bn bank capital deadline

The Treasury and the Central Bank of Kenya disagree on whether lenders should have until 2029 or 2032 to reach a Sh10 billion core capital requirement, and 14 banks face a December 2026 milestone.

What happened

The National Treasury and the Central Bank of Kenya (CBK) are negotiating over the Sh10 billion core capital requirement for commercial banks after disagreeing on the deadline [3]. Treasury Cabinet Secretary John Mbadi proposed, in the June 2026 Budget Statement, extending the final deadline from December 2029 to December 2032 and removing the annual capital-raising milestones [3]. The CBK has maintained that banks must keep working towards the existing timetable, including the Sh5 billion target due by December 2026 [3]. Mbadi has said the two institutions are in discussions and will agree a position [3].

Why Kenyans are searching for it

The sources do not say what has driven the recent interest in the Central Bank of Kenya. They do describe a live dispute with near-term consequences, including a December 2026 deadline and reported pressure on smaller lenders [1][2].

Key facts

• The Business Laws (Amendment) Act, 2024 amended the Banking Act to raise the core capital banks must hold in stages [2][3].
• The existing schedule requires Sh1 billion to Sh3 billion by December 2025, Sh5 billion by December 2026, Sh6 billion by December 2027, Sh8 billion by December 2028 and Sh10 billion by December 2029 [3].
• According to figures reported in November 2026, 14 commercial banks had core capital below Sh5 billion as of June 2026 [2].
• Banks that miss the threshold could face regulatory action, including possible reclassification as microfinance banks and restrictions on some services [2].
• According to [1], the CBK said banks below the Sh5 billion target had not yet responded to its query on capital-raising measures.
• Mbadi has described the disagreement as a simple matter and not a major concern [3]. The sources do not say whether the proposal to extend the deadline has been approved.

What to watch

The sources do not give a final outcome. Points to follow include whether the Treasury and CBK agree on one deadline, how the 14 banks respond before 31 December 2026 [2], and whether lenders announce new capital-raising, partnerships, or mergers, which the sources say are expected [2].

Sources

1. [1] Mbadi seeks CBK truce on Sh10bn bank capital fallout - Business Daily
2. [2] 14 Banks face downgrade as CBK enforces KSh 5 Billion capital requirement by December 2026 - Bizna Kenya
3. [3] Treasury and CBK clash over bank capital deadlines as compliance pressure mounts - TechTrendsKE

Compiled by the NairobiCity trend desk from the sources above.