Ajabu Africa News

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Customers of the collapsed Chase Bank ponder their fate. PHOTO | EVANS HABIL | NATION MEDIA GROUP

By:

EDWIN OKOTH

Posted:

Apr,21-2016 11:12:53

Chase Bank will be reopened next Wednesday after the Central Bank of Kenya agreed with Kenya Commercial Bank (KCB) on modalities to bring the collapsed lender back on its feet.

The Central Bank of Kenya and the Kenya Deposit Insurance Corporation reached an understanding with the KCB on modalities to reopen the bank put under receivership and a possible acquisition of a majority stake in it.

In the arrangement announced by CBK on Wednesday, KDIC (the receiver) has appointed KCB as the manager under the provisions of Sections 44(2)(b) and 44(3) of the Kenya Deposit Insurance Act, 2012 to carry out the business and manage the assets and liabilities of CBL.

KCB's will now facilitate the safeguarding of the interests of Chase Bank's depositors and creditors, and the wider public interest.

"All Chase Bank Ltd (in receivership) branches will open by Wednesday, April 27, 2016. The online and mobile banking services will also become available. However, branches may initially offer limited banking services," CBK said in a statement.

IMMEDIATE ACCESS TO SH1M

Chase Bank customers will have immediate access to their deposits up to a maximum of Sh1 million.

On this basis, 167,290 accounts (equivalent to 97 per cent of accounts or 6 per cent of total deposits) will have their funds available in full.

CBK said those with deposits in excess of Sh1 million will wait for further details as their deposits will be made available in a "structured manner in the near future".

The banking regulator also expressed confidence in KCB’s ability to take over the collapsed lender assuring customers that the lender will be liquid going forward.

"CBK and KCB will ensure that Chase Bank Ltd (in receivership) will have adequate liquidity for its operations. KCB will make available a management team that will assist in the receivership," CBK said.

Details and timelines surrounding the process of KCB's interest in a majority stake of the bank, an acquisition and the exit from receivership were not readily available.

CBK also warned that those involved in management blunders that brought down the bank will not go unpunished.

"We have confidence in the strength of our banking sector, and the further boosting of confidence that these steps will provide.

"As has also been indicated, firm action will be taken against those who have abused their fiduciary duties of managing our financial institutions," the CBK said.

Source:

Nation