Imperial Bank's branch in Likoni, Mombasa closed on October 14, 2015
after the financial institution was placed under receivership. PHOTO |
KEVIN ODIT | NATION MEDIA GROUP
NIC
Bank is set to take over some deposits, assets and liabilities of the
collapsed Imperial Bank, following an agreement with the Central Bank of
Kenya (CBK).
The move signals the banking sector regulator’s intention to liquidate Imperial Bank through its agency, the Kenya Deposit Insurance Corporation (KDIC).
“Subject to a due diligence and contract review, and following negotiations, KDIC will dispose of, and NIC will assume, a portion of the remaining verified deposits along with certain other assets and liabilities,” said CBK in a statement yesterday.
“NIC will also assume the majority of IBL (Imperial) staff and branches, and announcements on the way forward will be made in the near future.”
The arrangement is similar to the one reached by CBK and KCB Group, which gives the country’s biggest bank an option to buy out the collapsed Chase Bank.
NIC, which had earlier planned to open several new branches in Kenya in the short term, is likely to pick some Imperial Bank branches to achieve the physical expansion plan.
READ: CBK has failed Imperial Bank depositors
Also read: Njoroge receives praise for rescuing economy
The extent of the Nairobi Securities Exchange-listed firm’s purchase of Imperial assets and the amounts involved are expected to emerge in the coming weeks.
KDIC will retain management and control of all Imperial assets and liabilities that it will not have disposed of, the CBK said. Proceeds from the liquidation will be used to compensate Imperial Bank’s depositors and creditors, with NIC also mandated to disburse the payments.
“NIC will disburse on behalf of KDIC a maximum of Sh1.5 million each to the remaining Imperial depositors, as soon as the High Court’s suspension of payments to Imperial depositors is lifted, and subject to account and identity verifications that were conducted previously,” CBK said in a statement.
The banking sector regulator said this process would give some 45,700 customers an opportunity to claim their cash in full, equivalent to 92 per cent of all the depositors.
The regulator had earlier contracted KCB and DTB to pay customers of the collapsed bank up to Sh1 million of their deposits, which raises the ceiling to Sh2.5 million.
The CBK said depositors will be granted access to their deposits in a structured manner to about 40 per cent of the remaining amount of verified savings.
A High Court ruling on the suspension of payments is expected on July 4, said CBK.
The move signals the banking sector regulator’s intention to liquidate Imperial Bank through its agency, the Kenya Deposit Insurance Corporation (KDIC).
“Subject to a due diligence and contract review, and following negotiations, KDIC will dispose of, and NIC will assume, a portion of the remaining verified deposits along with certain other assets and liabilities,” said CBK in a statement yesterday.
“NIC will also assume the majority of IBL (Imperial) staff and branches, and announcements on the way forward will be made in the near future.”
The arrangement is similar to the one reached by CBK and KCB Group, which gives the country’s biggest bank an option to buy out the collapsed Chase Bank.
NIC, which had earlier planned to open several new branches in Kenya in the short term, is likely to pick some Imperial Bank branches to achieve the physical expansion plan.
READ: CBK has failed Imperial Bank depositors
Also read: Njoroge receives praise for rescuing economy
The extent of the Nairobi Securities Exchange-listed firm’s purchase of Imperial assets and the amounts involved are expected to emerge in the coming weeks.
KDIC will retain management and control of all Imperial assets and liabilities that it will not have disposed of, the CBK said. Proceeds from the liquidation will be used to compensate Imperial Bank’s depositors and creditors, with NIC also mandated to disburse the payments.
“NIC will disburse on behalf of KDIC a maximum of Sh1.5 million each to the remaining Imperial depositors, as soon as the High Court’s suspension of payments to Imperial depositors is lifted, and subject to account and identity verifications that were conducted previously,” CBK said in a statement.
The banking sector regulator said this process would give some 45,700 customers an opportunity to claim their cash in full, equivalent to 92 per cent of all the depositors.
The regulator had earlier contracted KCB and DTB to pay customers of the collapsed bank up to Sh1 million of their deposits, which raises the ceiling to Sh2.5 million.
The CBK said depositors will be granted access to their deposits in a structured manner to about 40 per cent of the remaining amount of verified savings.
A High Court ruling on the suspension of payments is expected on July 4, said CBK.
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