The Central Bank of Kenya could receive an injection of $170 million from the government if a new bill designed to hand the central bank greater independence is adopted by the national assembly.
The central bank has, at present, five billion shillings ($57 million) in authorised capital. Under the proposed Central Bank of Kenya Act 2014, this would quadruple to 20 billion shillings.
Recapitalisation can be a sensitive issue. Both the Bank of Uganda and the Bank of Mauritius were made to wait for capital injections they were entitled to receive from their respective governments.
Should the Central Bank of Kenya's capital levels fall below the 20 billion shillings, the government would be obliged to transfer the necessary "currency or negotiable debt instruments" within a period of "no more than 30 calendar days".
An initial Central Bank of Kenya Act was established in 1966. It was, however, short on detail, prompting the government to issue other pieces of legislation at a later date to set out the central bank's supervisory role in the banking and payment systems.
Its legal status was reinforced in the Kenya Constitution 2010, which stated that it should operate free from any "direction or control of any person or authority", but the country's authorities are looking to go one step further.
The new Act contains a number of measures that would, if passed, bolster the central bank's independence. The old Act notably features a clause that allows the minister for finance to dictate monetary policy in "exceptional circumstances". This clause would be removed.
In exchange for more independence, the central bank would be expected to publish a statement "as soon as possible" after each monetary policy meeting outlining the "rationale" behind the committee's decision.
There are also notable changes to the central bank's governance, including the terms of appointment of the governor and the two deputy governors. At present they are appointed for four years, with the option of renewing. The new legislation would increase this to six years but remove the option for reappointment.