Tired of refund delays, Imperial Bank depositors invoke divine intervention

Imperial Bank Head office at Westlands, Nairobi. [File, Standard]

Three years ago, Imperial Bank depositors woke up and could not access any of their cash. That was mid-October.

The lender had prior to the surprise closure been upbeat, posting profitability in its half-year results and even signing off crucial funding for a bond.

But its fortunes were to dwindle with the long-serving boss Abdulmalek Janmohammed who collapsed and died.

Now, three years down the line, a dejected lot claiming to own 75 per cent of deposits in the failed lender congregated in solemn prayer invoking God where years of dashed hope from the regulator and insurance protection are yet to bear fruit.

The unusual gathering of the depositors drawn from all faiths only confirmed the saying that when it is a question of money, everybody is of the same religion.

“I want to pray for the well-being of all, those of us who are afflicted, may God give us peace and may all that we ask in his name be fulfilled,” a Sikh prayed.

A Hindu depositor prayed for mercy and in Sanskrit, he invoked the Gita to help out. A Christian depositor prayed to God to be their refuge at this time of crisis.

And a Muslim cleric retorted their depletion of trust in the very institutions, financial and regulatory they had placed all currency upon.

“You can love something but at the end, it is injurious to you, and you can hate something which at the end is beneficial. We have faith to the lender but the main faith is to Allah,” he said.

The depositors say they are running out of patience and in its place anger is seeping in. But who do they turn that anger to?

“For three years, we have struggled to pay school fees, businesses have closed, retirees have gone back to work and we have lost some of us who could not pay for their health care,” they said.

“Meanwhile, the perpetrators are still out there,” they argued as the depositors who spoke explained their predicament.

Kenya Depositors Insurance Commission (KDIC) and Central Bank of Kenya (CBK) representatives were missing in the special prayers’ meeting despite a claim that they were invited.

Excusing themselves

The depositors said that KDIC had called to cancel on Saturday morning, excusing themselves for being out of town.

And with the frustrations, the depositors even deliberated joining suit at the regional court in Arusha against the regulator.

Imperial Bank depositor Wambui Kibicho of Pontrilas Investments Ltd moved to the East African Court of Appeal August last year to compel CBK to compensate depositors for funds lost in the bank’s Sh38 billion fraud.

The petitioner argued that CBK officials’ actions and omissions in the Imperial Bank fraud - which was orchestrated for over 15 years ago - were in breach of the East African Community founding treaty on the obligations of good governance of banking institutions. It was meant to protect individual depositors’ rights in a regulated bank.

But that costs money too which they figure is still sealed in Imperial Bank vaults.

“Our money is being used to pay employees who are not serving us, paying rents on branches that are not open to us yet we continue to suffer,” they said.

But there is light at the end of the tunnel with the Kenya Commercial Bank having placed a binding offer with CBK.

The depositors appealed to KCB to offer them access to 100 per cent of their deposits which they say will boost confidence and put them out of their misery.

But being a commercial decision it is unlikely that they will get as much, and they add that they are anxious about how much they will get since the transaction is under lock and key.

KCB is holding cards close to its chest on the offer, with CBK adding that the buyer is being persuaded to improve its offer in its quest to acquire Imperial Bank’s assets.

The lender’s receivership under the KDIC has been extended to January next year after the Kenya Tea Development Agency, CBK and two others filed suit for consent to extend receivership.

The tea agency, which has Sh2.9 billion in deposits at the collapsed lender argues in court that the regulator has kept them and other depositors in the dark and want access to information on the deal.

CBK Governor Patrick Njoroge said during a Monetary Policy Committee press briefing last month that he would meet depositors at various points of the deal and communicate appropriately.

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