NAIROBI, Kenya, Sept 22 – The Central Bank of Kenya (CBK) has flagged seven commercial banks for failing to meet the minimum core capital requirement of Sh3 billion.

In its latest Bank Supervision Annual Report, CBK said the seven lenders were in breach of Section 7(1) of the Banking Act, which sets the minimum core capital requirement at Sh3 billion, up from Sh1 billion previously.

“Seven commercial banks were in violation of Section 7(1) of the Banking Act due to failure to maintain the minimum core capital required of Ksh.3 billion,” CBK said.

The regulator is gradually increasing the minimum core capital requirement, with a target of Sh10 billion to be implemented in phases.

CBK also found that five commercial banks were in violation of Section 18 of the Banking Act and CBK’s Prudential Guideline on Capital Adequacy.

Four banks failed to meet the core capital to total risk-weighted assets ratio of 10.5 per cent, while three failed to meet the core capital to total deposits ratio of eight per cent.