CBK puts Dubai Bank in receivership for 12 months

The Central Bank of Kenya has put Dubai Bank in receivership.

The regulator on Friday said the lender had violated banking regulations by maintaining substantially inadequate capital and may fail to meet its financial obligations. 

Dubai Bank, CBK said, is experiencing serious liquidity and capital challenges, which have raised concerns that it may collapse any time from now. 

“CBK, as a prudential regulator, has considered and determined that Dubai Bank’s violations of banking laws and regulations, including failure to maintain adequate capital and liquidity ratios as well as provisions for non-performing loans and weak corporate governance structures, is detrimental to the interests of its depositors, creditors and the public,” the regulator said. 

The CBK also pointed out that it had been in contact with Dubai Bank in an attempt to redress the situation but there had been no compliance by the bank and its cash reserve ratios have continued to deteriorate. 

The CBK has appointed the Kenya Deposit Insurance Corporation as the receiver for the lender, whose future is now in limbo.

The bank was issued with a banking licence in April 2000.