Woman detained over malicious posts against Family Bank

Family Bank has reassured its clients that it is stable and not facing any liquidity challenges in the wake of a scare caused by circulation of malicious messages claiming that it was about to be placed under receivership.

The negative messages, which have sent fears of possible collapse, led to panic withdraws between Monday and Wednesday last week.

To reassure their customers, the bank’s Chief Executive, Mr David Thuku, said they had to engage with each customer personally.

“No bank can survive if all the customers came one day and said they want their cash. Initially, when those rumours started, there was obviously a lot of fear and enquiries, so we engaged every customer to tell them those rumours were unfounded,” he said.

The bank’s reassurance came as it emerged that police had arrested a woman suspected to be behind a scheme, which the lender claims is part of a plan by amorphous people to make the bank collapse.

Detectives from the Banking Fraud Investigations Unit spent the better part of yesterday questioning Christine Njeri at their offices on the 5th floor of CBK Pension Towers along Nairobi’s Harambee Avenue, where she was taken after spending the night at Kileleshwa police station. She was arrested on Friday night from her house in Kahawa West.

The unit’s boss, Mr Ngatia Iregi, declined to say whether or not she will be charged.

However, those in the know said the suspect, 35, is a businesswoman in Nairobi and police are pursuing more leads to make more arrests of people who have sent the messages that have since gone viral.

With 1.7 million customers, Family Bank is the fifth largest in terms of branch network with its 93 branches. Another three are set to be opened in the next few weeks. The branches will be at River Road, Wangige and Gikomba.

Last year, its net earnings rose to Sh1.8 billion as net loans rose 47.3 per cent to Sh55.9 billion.  It is expected to release its financial results for quarter three this week.

A run on its deposits would have caused it to succumb to pressure as happened to Chase Bank in April.

At the time, Central Bank of Kenya (CBK) Governor Patrick Njoroge blamed bloggers, saying the mid-tier lender, which has since been re-opened after being placed under receivership, could have been saved if panic messages had not spread on Twitter and WhatsApp.

FIRED NINE MANAGERS

Family Bank’s current woes were triggered after it emerged that CBK had recommended the prosecution of some of its top officials for failing to report to the Financial Reporting Centre transactions by the National Youth Service scandal suspects.

The bank has consistently said it is cooperating with the authorities in the investigation and has fired nine of its managers who were adversely mentioned in the scam.
Mr Peter Munyiri, who was the CEO at the time of the scam, relinquished his position in June.

On Saturday, Dr Njoroge declined to comment on the matter.

“You should never call me directly again on this number for any matter. No one calls me directly,” he said.

CBK has been facing a backlash on social media platforms of late after it emerged that more than 20 banks handled money that was looted from the NYS but the regulator only fined three of them, including Family Bank.

Family Bank’s CEO said that lenders could be punished for simply doing their job of facilitating payments.

“Let me clarify that every government department pays for goods and services and they all have accounts at Central Bank. However, the people who supply these goods have accounts in commercial banks,” he said.

He added: “The fact that Family Bank held accounts for people who supplied goods and services to NYS is in the public domain. I don’t want to talk a lot about a matter in court but, so as to clear this, let me say that investigators came and we gave them what they needed and, if they want anything more, they can come back.”