The Central Bank of Kenya (CBK) is willing to provide emergency monetary assistance to the insolvent Spire Bank, whose core capital and shareholder money have been wiped out by eight years of consecutive losses.
CBK governor Patrick Njoroge said the regulator would provide the teachers-owned bank access to its reduced lending facility if it ran out of funds for its day-to-day operations, including satisfying client demand, in the short term.
The CBK “discount window” facility is generally used as a last resort by troubled banks after they have exhausted all other options, including borrowing from one another.
Banks can borrow from the regulator using this facility at a current interest rate of 13%.
