DIVIDEND

CBK transfers Sh5 billion to state account

Funds credited to the Ministry of Finance’s Deposit Account at CBK.

In Summary

•The monies released on Wednesday is an exceptional distribution from CBK’s General Reserve Fund (GRF) in the current Financial Year FY2020/2021.

•The transfer is in accordance with Sections 9 and 51 of the CBK Act, and followed approval by the CBK board.

CBK Headquarters
CBK Headquarters
Image: FILE

The Central Bank of Kenya (CBK) has transferred Sh5 billion to the government Consolidated Fund.

The monies released on Wednesday is an exceptional distribution from CBK’s General Reserve Fund (GRF) in the current Financial Year FY2020/2021.

The transfer is in accordance with the CBK Act, and followed approval by the CBK board.

The  Act stipulates that bank shall establish and maintain a fund designated as the General Reserve Fund, to which shall be transferred at the end of each financial year at least ten per centum or any other amount.

The board, in consultation with the Minister (CS), may determine, of the net annual profits of the bank after allowing for the expenses of operation and after provision has been made for bad and doubtful debts, depreciation in assets, contributions to staff benefit funds, and such other contingencies and accounting provisions as the bank deems appropriate.

The Act limits CBK from engaging in trade, own or acquire any direct interest in any commercial, agricultural, industrial or similar undertaking, except in the course of obtaining satisfaction for any debt due to the bank, and any such interest shall be disposed of at the earliest suitable opportunity

In a statement on Thursday, CBK said the transfer was executed by crediting the Ministry of Finance’s Deposit Account at CBK.

The CBK Board authorised the transfer during its discussion of the unaudited Financial Statements for FY2020/2021 as at December 31, 2020, noting  "exceptional circumstances" caused by an unprecedented global pandemic that have put a strain on government’s resources.

"In particular, 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," it said in a statement.