By KBC Reporter
About 99 percent of the loans issued by insolvent Dubai Bank have been categorized as non-performing.
Kenya Deposit Insurance Corporation Acting Managing Director Mohamud Ahmed says to date only 10 percent of the Dubai Bank’s depositors have been paid their dues.
Ahmed also says confidence has been restored in Chase Bank with more than 1,300 new accounts since it was reopened.
The Kenya Deposit Insurance Corporation -KDIC commenced operations in 2014, taking over the reins of the former Deposit Protection Fund Board. It offers insurance to depositors in financial institutions to help restore confidence and stability in the banking sector.
The state corporation is currently liquidating 16 institutions, with Dubai Bank, Chase Bank and Imperial Bank all under receivership.
During a media workshop Thursday morning, Ahmed disclosed that 99 percent of the loans issued by Dubai Bank have been categorized as non-performing.
His analysis on the status of Chase Bank was less gloomy however, noting that transactions worth 5.4 billion shillings had been made through the system since it was reopened, with 1,343 new accounts opened, an indication that depositor confidence in the institution had been restored.
With regards to Imperial Bank, 87 percent of depositors had accessed their accounts withdrawing up to 1 million shillings, however the process had been slowed by a suspension of payments by the courts.
These protracted legal battle both during receivership and liquidation as well as slow uptake of reimbursed deposits and poor corporate governance in some institutions were cited as the major challenges the KDIC is facing in implementation of its mandate.