Depositors of the fallen Chase Bank will get a capped amount of Ksh500,000 as from July 1, even as the Kenya Deposit Insurance Corporation (KDIC) kicks off liquidation plans.
The announcement comes a day after the Central Bank of Kenya (CBK) gave a nod to KDIC’s report that recommended liquidation of the lender due to huge financial gaps discovered during audit.
“Considering the weak status of CBLIR’s financial position, liquidation was the only feasible option to facilitate the orderly resolution of the residual assets and liabilities of CBLIR in accordance with the Laws of Kenya to protect the interest of CBLIR depositors, its creditors and the wider public interest,” read KDIC report.
Chase Bank collapsed in 2016 and placed under receivership on April 7, 2016, with KDIC being appointed as the receiver by CBK.
On April 20, 2016, KDIC appointed KCB Bank Kenya Limited (KCB) as Manager of Chase Bank Limited (In-Receivership) (CBLIR), with the concurrence and approval of CBK.
CBK reports that at least 162,970 deposit accounts equivalent to 97 percent of the depositors’ accessed their funds in full, following the management by KCB.
On August 17, 2018, 75 percent of the value of deposits at Chase Bank and 75 percent of the value of assets were carved out and transferred to SBM Bank Kenya Limited (SBM Bank), a subsidiary of SBM Holdings Limited.
Already, CBK has revoked Chase Bank’s licence, setting the stage for liquidation.
“It is notified for the information of the general public that in exercise of the powers conferred by section 6 (1) (a) of the Banking Act, the CBK has revoked the licence of Chase Bank Limited with immediate effect,” said CBK governor Patrick Njoroge in a special gazette notice.