Reprieve for Imperial Bank depositors

By Ruth Mutegi

Over 40, 000 Imperial Bank customers can now breathe a sigh of relief after two commercial banks signed an agreement with the Central Bank of Kenya to get them paid.

Central Bank Governor Patrick Njoroge announced the much awaited plan of how depositors will be paid back their money.

In repayment plan, the CBK says 44,300 depositors will get full access to their deposits, while another 5,700 depositors will be paid 1 million shillings, which is a portion of their deposits.

The closure of the bank which has taken a long time to reopen, seem to have been caused by a disagreement between the Central Bank Of Kenya and Imperial Bank shareholders on the re-opening and repayment plan.

The agreement is between Central Bank of Kenya (CBK), the Kenya Deposit Insurance Corporation with Kenya Commercial Bank and Diamond Trust Bank to pay the claims.

The agreement will provide depositors of Imperial Bank Limited access to their deposits in a structured manner with the remaining deposits and loans subjected to a due diligence review by KCB and DTB, which would inform what portions, could be transferred to KCB and DTB as partners in the bid to refund Imperial customers.

Central Bank of Kenya governor Patrick Njoroge says the bank has put mechanisms in place through which Imperial Bank Limited depositors can fill their claims at any KCB or DTB branch countrywide.

Njoroge says once filled a response will be provided within three business days and payment made if the claims are approved.

The bank was placed under receivership last month due to what CBK termed as gross misconduct following the loss of billions of shillings through an elaborate scheme by directors of the bank led by the former chief executive the late Jan Mohammed.

Investigations by forensic auditors showed fraudulent disbursement of loans coupled with inadequate provisions for bad loans eroded Imperial Bank’s capital adequacy position, making it mandatory to pump in new funds.

  

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