CBK 'unhappy' with low Imperial Bank depositors' claims

Less than a quarter of the Imperial Bank’s depositors have filed claims, frustrating Central Bank of Kenya’s plans of settling all repayments by Christmas.

CBK Governor Patrick Njoroge (pictured) said 10,600 claims had been filed by end of Monday out about 45,000 deposit accounts that were active when the lender collapsed three months ago.

“We are a bit slow on the numbers,” Dr Njoroge said yesterday in an update where he was flanked by KCB managing director Joshua Oigara and Diamond Trust Bank boss Nasim Devji.

More than 6,600 claims had already been settled by yesterday morning while some questions had been raised about the credibility of 1,900 requests.

“I can say I feel confident with that (the rate of claim settlement),” added the CBK principal. The two commercial banks headed by Mr Oigara and Ms Devji are handling the settlements on behalf of the Kenya Deposit Insurance Corporation – which is the receiver manager of Imperial Bank. Njoroge said 500 claims were thought to be either fraudulent or could have been a result of multiple requests. “It might be that a depositor made more than one claim.”

CBK had projected that all depositors will have been repaid up to Sh1 million by the end of the week. Customers with more than Sh1 million in deposits were to get the excess cash in a graduated scale later into the new year. A yet-to-be-announced formula would be applied in determining the settlement.

At the same time, the governor said he was comfortable with the level of inflation, even though November’s headline number of 7.32 per cent was elevated after rains washed away roads and prevented produce reaching markets.

Njoroge also told a news conference he expected the current account deficit, which he said stood 6.9 per cent of GDP, to narrow in 2016 as tourism inflows and exports strengthened and consumer imports slipped.
Responding to a question on whether he expected the shilling to remain stable in 2016, Njoroge said the bank remained “wedded” to a flexible exchange rate and was not targeting any rate.

Njoroge earlier this month said tighter monetary policy had stabilised the shilling and anchored inflation in the Government’s preferred 2.5-7.5 per cent band despite the November spike to the top of the range caused by heavy rains.

The governor, who took office in June, raised the bank’s benchmark rate by 150 basis points to 11.5 per cent shortly after taking charge. That followed a similar hike a month earlier. Open market operations have also mopped up shilling liquidity.

Foreign reserves had reached $7.2 billion, equivalent to well over four months of import cover, he added.

—Additional reporting by Reuters