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NEWS & CURRENT AFFAIRS

The Nairobian

Chase Bank receives Sh100m in new deposits

News

By Alphonce Shiundu | May 04, 2016

*Kenya Deposit Insurance Corporation, the receiver managers said Chase Bank depositors’ withdrawals stood at Sh1.6 billion in three days of reopening.* [PHOTO: FILE/STANDARD]

Troubled Chase Bank, which reopened a week ago received Sh100 million in new deposits within three days of reopening.

The statutory managers told a parliamentary inquiry into Kenya’s banking sector that they had set aside Sh5 billion expecting massive withdrawals. However, that did not happen because many of the big-money depositors said they were willing to leave their money in the bank and promised to continue depositing.

The Kenya Deposit Insurance Corporation, the receiver managers, also revealed that within those three days, last week, depositors – who were allowed to withdraw up to Sh1 million of their deposits— took away Sh1.6 billion.

They withdrew Sh1 billion on the first day (Wednesday), which dropped to Sh400 million on the second day and down to Sh200 million on the third day (Friday). “Chase Bank has given us very good hope. Tomorrow (Wednesday) we will open the cheques and the RTGS... but we will keep monitoring. We have met some of the large depositors and they have said they are not removing their money, they were actually saying they want to deposit,” the acting KDIC boss Mr Ahmed Mohamud said.

Addressing the National Assembly’s Finance, Planning and Trade Committee, the KDIC boss confirmed that Sh8 billion worth of assets had been recovered from the directors of the bank. “These were assets that were irregularly obtained from the bank,” he said at a meeting in Nairobi’s Continental House.

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As a result of the confidence in the bank, the KDIC boss said, the bank will today allow its cheques to be cashed through the Kenya Commercial Bank, and they will also allow wire transfers (real-time gross settlement systems or RTGS).

“We met some of the large depositors and they said they are not removing their money. They were actually asking if they can invest the money in fixed deposits. We are still monitoring the progress,” said Mohamud.

He added that the receivership which is for one year is likely to be lifted before the expiry of that term.

“We said the receivership is for 12 months. It can be shorter than that if the signs we have seen are anything to go by,” he told MPs.

The chairman of the House committee Benjamin Langat (Ainamoi) said if Chase Bank gets back to its feet, in an environment where there is increased bank supervision by the Central Bank, then it will be the first bank to survive and many suitors, including KCB Bank Group will be keen to buy substantial stake.

The KDIC boss confirmed. “Chase Bank is a bride with many suitors. I am sure KCB will do the due diligence and may be very keen to buy a stake in that bank,” said Mohamud.