Only 7pc of depositors of collapsed Dubai Bank made claims

NAIROBI: Only 400 customers of the collapsed Dubai Bank have been compensated since the receiver manager took over operations of the lender last month.

That number represents just about seven per cent of insured depositors in the bank that has since been closed for gross violation of industry guidelines.

Central Bank of Kenya Governor, Patrick Njoroge, said the firm had about 6,400 customers, each with less than Sh100,000 worth of deposits. "We have received claims from only 850 former customers and settled just about 400 of that," Njoroge said yesterday in an update following the takeover and subsequent liquidation of Dubai Bank.

The small number of settled claims raises questions on the actual number of depositors in the bank, and more important, the challenge the receiver manager could face in tracing the missing customers.

Dubai Bank had a total of 7,400 deposit accounts, most of which will be fully compensated by the Kenya Deposit Insurance Corporation – the agency called in to liquidate assets of the collapsed bank.

About 1,000 customers who had deposits of over Sh100,000 would be compensated on a pro-rata basis after the smaller customers have been paid off. Regulations guarantee retail depositors whose amounts due in the bank is less than Sh100,000.

Minimal requirements for opening of bank accounts could represent a huge challenge, especially in tracing the beneficiaries or next of kin for customers that cannot be traced.

Entry of mobile phones, and stricter Know-Your-Customer requirements that include personal details of family, have seen depositors surrender more information while opening bank accounts, increasing the ease of tracing customers.

The Unclaimed Financial Assets Authority has in the past decried the limited customer information held by commercial banks and other players in the financial sector. It reckons that scanty information had stood in the way of tracing beneficiaries. Some had only submitted their postal addresses as contact information, yet substantial amounts due to them were lying with the agency.