Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Kenyan bank acquires collapsed Chase Bank

21 April 2016, 16:05

Nairobi (Xinhua) -- Kenya's top regional financial institution, the Kenya Commercial Bank (KCB) Group, has taken over the operations of Chase Bank, which collapsed three weeks ago sending ripples in the East African nation's banking sector.

The Central Bank of Kenya (CBK) Governor Dr. Patrick Njoroge told a news conference in Nairobi that that the takeover will see all the branches of the troubled lender open next week.

"All the Chase Bank branches will open by April 27. The online and mobile banking services will also become available. However, branches may initially offer limited services," Njoroge said.

Depositors who had their savings frozen in the bank after it was put under receivership will now be able to access their funds.

The move comes after KCB Managing Director Joshua Oigara confirmed last week that his bank was willing to play a role in the revival of Chase Bank without providing details.

The bank currently operates in Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan. Oigara said that bank also plans to set up a subsidiary in the Democratic Republic of Congo by the end of 2016.

Chase Bank's closure caused panic in the local financial markets when the Central Bank sent executives from the Kenya Deposit Insurance Corporation accompanied by the Police to take over the Bank.

A mid-tier lender with 62 branches across Kenya, mostly serving corporate, retail and small and medium enterprises, Chase Bank suddenly failed to meet its depositors' demands for cash, leading to its closure.

Njoroge said even though the Central Bank was being blamed for the sudden collapse of the Chase Bank, it was not the responsibility of the apex bank to run the commercial banks.

"Chase Bank customers will have immediate access to their deposits of up to a maximum of 10,000 U.S. dollars. On this basis, 167,270 account (equivalent to 97 percent of accounts or 6 percent of total deposits) will have their funds available in full," said the apex bank.

The other deposits, said CBK, will be available in a structured manner with details to be announced later.

Njoroge said the moratorium on payments to creditors and lenders remains in place. However, he said the Manager will correspond with them in the near future with details of how these would be dealt with.

The regulator noted that KCB and Kenya Deposit Insurance Corporation, the receiver manager, will institute efforts to recover loans.

"Ongoing efforts to collateralise existing loan and recover funds obtained irregularly or are non-performing will be stepped up. Existing borrowers are required to continue servicing their loans," added CBK as it assured depositors that the banking sector is sound and firm action will be taken against rogue lenders.

Among those who had been hit hard by the closure of Chase Bank were farmers, students and small businesses.

The Central Bank placed Chase Bank under receivership following liquidity problems after its top executives were forced to resign after giving conflicts accounts of the financial state of the bank within a week.

The first statement had understated insider loans to staff and directors by about 80 million dollars, necessitating the second set of statements.

Imperial Bank and Dubai Bank are other lenders that have collapsed in the last nine months in what was described as "toxic lending practices." 

- Xinhua


Read more from our Users

Submitted by
Kenya says will return to interna...

Kenya will return to international markets to borrow when it feels the time is right, National Treasury Cabinet Secretary Henry Rotich said on Tuesday. Read more...

Submitted by
Victor Tinto
Deal with corruption or lose in 2...

A Jubilee Party MP says that the unending corruption claims against the government are killing President Uhuru Kenyatta's re-election efforts for 2017. Read more...

Submitted by
Victor Tinto
MP accuses Raila of making up fal...

An MP has accused CORD leader Raila Odinga of bringing up non existent corruption scandals to hurt the Jubilee government. Read more...

Submitted by
Victor Tinto
Leave office if you can't handle ...

Leave office if you cannot handle corruption, an MP has told President Uhuru Kenyatta. Read more...

Submitted by
William Korir
Give me the chance to unseat Uhur...

Give me the chance to send President Uhuru Kenyatta home, Kalonzo Musyoka tells Kenyans. Read more...

Submitted by
William Korir
Explain your foreign trips since ...

Explain your foreign trips, Musalia Mudavadi tells President Uhuru Kenyatta. Read more...