BY SAM ALFAN
Customers at Chase Bank are a troubled lot after Central Bank of Kenya (CBK) today April 7, 2016 placed the now fallen financial giant under receivership.
CBK also appointed the Kenya Deposit Insurance Corporation (KIDC) as the receiver of Chase Bank Limited.
Governor Dr. Patrick Njoroge, CBK said Chase Bank which has 62 branches across the country was placed under receivership for failure to meet its financial obligations, making it unable to sustain itself.
“Chase Bank has of late been experiencing liquidity difficulties due to lending and failure to recover loans,” said the CBK boss.
He said the appointment of KIDC to run the bank for 12 months has been carried out in the interest of Bank’s depositors, creditors and members of the public, adding that KIDC will be required to release information on the bank’s recovery progress in due course.
Dr Njoroge however, noted that Chase Bank stakeholders are determined to provide capital and resources for its reopening and CBK is focused on working with the shareholders to restart the institution.
He said two directors of the bank have already stepped aside to enable auditors carry out investigations.
“The audit of all balance sheets and accounts will be in-depth and any individual who was involved in embezzling the banks funds will be held to account,” noted the Governor.
Speaking during a press briefing at CBK offices in Nairobi, the Governor also said the core mandate of KIDC will be to control, conduct the affairs and business of the institution.
He further noted that KIDC will also exercise all the powers of the institution to the exclusion of its Board of Directors and advise CBK of an appropriate resolution strategy.
Dr. Njoroge reiterated CBK’s commitment to fostering banking system stability, saying the bank will exercise its supervisory mandate in a fair and even-handed manner.
Yesterday, the Chase Bank appointed Mrs. Muthoni Kuria as its Chair following the stepping aside of Mr. Zafrullah Khan and Mr. Duncan Kabui from the positions of Chairman and Group Managing Director respectively following the financial statements of 2015 that raised certain concerns.