President Ruto during the assent of the bill at the State House Nairobi/PCS
President William Ruto has signed into law two key pieces of legislation aimed at strengthening Kenya's financial sector and updating the country's parliamentary pensions framework to align with the constitution and current legal standards.
The two laws—the amendments to the Central Bank of Kenya legal framework and the Parliamentary Pensions (Amendment) Act—were assented to during a State House ceremony attended by senior government officials, members of parliament and representatives from key state institutions.
During the ceremony, officials explained that the amendments to the Central Bank law are intended to enhance financial stability by preserving the Central Bank's discretion in providing emergency liquidity support to financial institutions facing temporary distress.
Under the new law, the Central Bank of Kenya will retain the authority to determine which institutions qualify for emergency lending, the interest rates applicable and the duration of such support.
The legislation provides that distress liquidity assistance may be extended for up to 12 months, with the possibility of extending the period to a maximum of five years depending on the performance and recovery prospects of the institution receiving the support.
The changes are expected to particularly benefit microfinance institutions, which play a significant role in expanding access to financial services for millions of Kenyans.
By allowing struggling institutions to receive structured liquidity support, the law seeks to prevent financial distress from spreading across the sector and affecting depositors and borrowers.
The legislation also expands the mandate of the Central Bank's School of Monetary Studies.
Under the new provisions, the institution will be permitted to provide training programmes both within Kenya and across the region, collaborate with other institutions and generate revenue through its educational and professional development activities.
The President also assented to amendments to the Parliamentary Pensions Act, legislation originally enacted in 1983 but considered outdated under the current constitutional order.
The amendments were introduced in Parliament by Makali Mulu on behalf of the Parliamentary Pensions Committee, chaired by the Speaker of the National Assembly.
Among the key reforms is the alignment of the law with Kenya's current legal definition of the age of majority.
The previous Act recognised dependants only up to the age of 16, while the Constitution and existing laws define adulthood as 18 years. The amendment updates this provision to ensure consistency with the law.
The legislation also reflects Kenya's bicameral Parliament by recognising both the National Assembly and the Senate in the management of parliamentary pension matters.
Pension committees and tribunals established under the Act will now include representation from both Houses of Parliament.
In addition, the amendments address gender equality by recognising widowers as eligible beneficiaries of the pension estate of deceased female Members of Parliament.
Previously, the law only explicitly recognised widows, despite administrative practice having evolved over the years.
Officials said the Bill had first been introduced during the previous Parliament but did not complete the legislative process before the end of its term. Its enactment now brings the parliamentary pensions framework into conformity with the constitution and modern governance standards.
Copies of the newly enacted laws were presented to the Deputy President, the Attorney General and the National Treasury for publication, implementation and administrative action, officially marking the completion of the presidential assent process.
