CBK puts Chase Bank in receivership

Thursday April 7 2016

Suspended Chase Bank Group MD Duncan Kabui.

Suspended Chase Bank Group MD Duncan Kabui. FILE PHOTO | DIANA NGILA | NATION MEDIA GROUP

By BRIAN NGUGI
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The Central Bank of Kenya (CBK) has put another Kenyan bank, Chase Bank, under statutory management for a year

due to what the regulator termed as unsafe financial conditions.

The regulator said Thursday it had taken the drastic decision saying Chase Bank had experienced “liquidity difficulties.”

“The Central Bank of Kenya has today Thursday appointed Kenya Deposit Insurance Corporation (KDIC) as the receiver manager for Chase Bank Limited for a period of twelve months, pursuant to the provisions of Sections  43 (1), 43(2) and (53)1 of the Kenya Deposit Insurance Act, 2012,” said CBK in a statement.

It explained: “Chase Bank Limited experienced liquidity difficulties following inaccurate social media reports and the stepping aside of two its directors. Consequently it was not able to meet its financial obligations on April 6, 2016.”

KDIC will assume the management, control and conduct of the affairs and business of the institution to the exclusion of its board of its directors and advise CBK of an appropriate resolution strategy as soon as it practicable and not later than twelve months, CBK said in the statement.

On Wednesday, Chase Bank chairman Mr Zafrullah Khan and group managing director Mr Duncan Kabui stepped aside following concerns over the credibility of the bank’s financial statements.