ABC Bank’s Sh400 million rights issue is a race against time to meet the Sh3 billion capital threshold by the end of the year. The lender, with a core capital of Sh2.59 billion at the end of June, is one of many banks in Kenya facing the challenge of raising additional funds to comply with the Central Bank of Kenya’s (CBK) new requirements. The CBK has mandated a gradual increase in core capital, starting from Sh1 billion in 2012, to reach Sh10 billion by 2029. This means ABC Bank needs to raise approximately Sh2 billion next year to stay compliant, which could involve another cash call or selling a stake in the bank. The bank’s managing director, Shamaz Savani, expressed confidence in the shareholders’ move, emphasizing their belief in ABC Bank’s growth strategy and long-term prospects. This rights issue is not an isolated case; other lenders like Paramount Bank and Sidian Bank have also turned to rights issues to secure fresh capital for immediate and long-term compliance. The revised Business Laws (Amendment) Act 2024 sets a timeline for core capital increases, with the minimum requirement set to reach Sh10 billion by 2029. This has left 11 banks, including ABC, in need of additional capital. As of June, other lenders like M-Oriental, Premier Bank, CIB International Bank, Middle East Bank Kenya, and the Development Bank of Kenya were also short of the Sh3 billion threshold. The situation highlights the competitive landscape in the banking sector and the need for banks to adapt to changing regulations to ensure their financial stability and compliance.