On April 4, 2024, the governor of the Central Bank of Kenya (CBK), Dr. Kamau Thugge, announced imminent plans to increase the minimum capital requirements for Kenyan banks. This will be Kenya’s first bank recapitalisation exercise since 1994, after an August 2015 attempt was cancelled.
The CBK aims to protect banks from heightened risks associated with climate change and cybersecurity, as outlined in the September 2023 Kenyan Financial Stability Report. Since 2022, Kenyan banks have faced a rise in fraud, data privacy concerns, cyber-attacks, and cybersecurity threats. These risks are exacerbated by the banks' growing interconnectedness with various sectors, cross-border operations, and rapid technological advancements. Additionally, climate change poses a significant risk, with frequent droughts and occasional floods affecting banks' asset quality, particularly for loan customers in the agriculture and real estate sectors. Beyond addressing these vulnerabilities, the recapitalisation will bolster the regional expansion of Kenyan banks as their capital
