Central Bank of Kenya: Sh1.3b unclaimed at collapsed Dubai Bank

More than Sh1.3 billion worth of deposits remains unclaimed in Dubai Bank three months after it collapsed, raising fears that most account holders may have been using the lender to run illegal activities.

Central Bank of Kenya yesterday said only 561 out of 7743 depositors of the collapsed lender had come forward to claim their cash, and had collectively been paid Sh37 million. The huge bulk of faceless account holders is now worrying authorities over the possibly links to money laundering and worse, terror financing.

CBK Governor Patrick Njoroge told Senators yesterday that it was disturbing that the account holders had not been identified, and is now opting to involve the police in identifying them.

“I think something else is going on there (in Dubai Bank),” Dr Njoroge said, adding that it was not normal for legitimate depositors to take so long to identify themselves. Dubai Bank sank with about Sh1.35 billion in customer deposits and is currently under liquidation.

“We are all sensitive about money, especially when it is the safety of your own money,” said the governor, who informed that senators that he would involve the police and other authorities in tracking and profiling the missing account holders. CBK’s Kenya Deposit Insurance Corporation, which is managing the repayment of Dubai Bank’s depositors, confirmed a small number of account holders have voluntarily come forth, and expressed concerns over the unclaimed deposits.

Dubai Bank was placed under receivership in mid-August for gross violation of sector guidelines, before CBK announced closure only two weeks later. A process to sell its assets, technically known as liquidation, was started.

Proceeds from the disposal of assets will be directed to settle the depositors and later, other creditors. Njoroge was responding to questions raised by nominated senator Beatrice Elachi, who was probing whether the account holders in both Dubai Bank and Imperial Bank were using the lenders as conduits for money laundering and financing terror.

“Were clients of these banks part of the system that we closed, would they have been using the accounts to fund terror and money laundering?” Ms Elachi had asked.