Banking sector plays a significant role in the growth of economies all over the world. The objective of this study was to determine Strategic Responses by Commercial Banks to financial distress in Kenya


The study is a survey based and utilized primary data collected from the central bank’s staff. The study targeted the management staff at the central Bank . The primary data was collected using a structured questionnaire that was administered to the target respondent.


The data was analyzed using statistical package for social scientist with the help of descriptive statistics and content analysis. The study revealed great emphasis and commitment from the central bank in addressing the financial distress encountered by commercial banks.


The research revealed that central bank adopts both proactive and reactive approaches in dealing with financial distress. The central bank is also fast in responding to financial distress and that there is tendency to centralize decisions to top management. The head of departments are more involved in identifying and implementing the responses to financial distress by central bank of Kenya. The central bank adopts relatively stable responses.


The need to have a stable financial system while giving the depositors the confidence they require to continue having through banks, mergers of commercial banks, acquisitions, diversification of products, reduced lending, have not supervised a bank in financial distress were cited as the strategic responses encountered in the pursuit of the financial distress by commercial banks.

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