Imperial Bank cries foul over client loss

Wednesday January 13 2016

Imperial Bank Chairman Alnashir Popat (second left) and other directors during the first press briefing on January 12, 2015 by the banks' shareholders since its closure four months ago. The bank has cried foul over client loss. PHOTO | DIANA NGILA | NATION MEDIA GROUP

Imperial Bank Chairman Alnashir Popat (second left) and other directors during the bank's first press briefing by shareholders since its closure four months ago on January 12, 2015. The bank has cried foul over loss of clients. PHOTO | DIANA NGILA | NATION MEDIA GROUP  

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Imperial Bank shareholders are accusing the Central Bank of Kenya (CBK) of handing over its customers to competitors without the lender’s knowledge.

Owners say they were kept in the dark over the regulator’s decision to disburse Sh8 billion through Kenya Commercial Bank and Diamond Trust Bank late last year.

In December, the Kenya Deposit Insurance Corporation (KDIC) released guidelines for about 44,300 customers with Sh1 million or less, who make up 89 per cent of the depositors, to access to their full amounts.

Large depositors (5,700) with about Sh88 billion were to get Sh1 million of their money through the two banks which would then conduct due diligence on the balance and would begin allowing access to cash by March this year.

The move has put the fate of the troubled bank in doubt since part of the plan to reopen it depended on some of the large depositors converting their money into equity.


“As a group of shareholders and a board, we are quite concerned that in many ways this is disenfranchising our institution moving forward because it does appear that all our data relating to our customers has been forwarded to these two institutions,” Mr Anwar Hajee told journalists at a press briefing in Nairobi on Tuesday.

Mr Hajee said they were unaware as to what KDIC and CBK had in plans for Imperial Bank as they had not received any formal communication.

“We have not been consulted on the actions that they took with regard to the disbursement of these funds to Diamond Trust and KCB and not aware about the long-term deeper relationship that the receiver manger had with these two institutions in terms of a plan,” he said.

The bank chairman, Mr Anashir Popat, said shareholders had proposed to have depositors access the Sh1 million upon reopening of the lender this year while large depositors would be paid within three years.

He said a strategic investor would have come on board within a year of re-opening according to their plan.

Mr Popat said CBK has closed them out and they now want to sit down and discuss the future of the lender.