CBK extends IBL receivership by six months as depositors pile pressure on directors

 

The Central Bank of Kenya (CBK) has extended the appointment of Kenya Deposit Insurance Corporation (KDIC) as receiver of Imperial Bank Limited (IBL) for a further six months.

“The Central Bank of Kenya hereby extends the appointment of KDIC as the receiver of Imperial Bank Limited for a further six months from October 13, 2016,” CBK said in a statement.

The regulator says the postponement follows a request by KDIC for an extension to offer the best resolution strategy as the 12 month receivership term nears its end.

“KDIC will maintain the management and control the bank and advise CBK of a resolution strategy as soon as it is practicable and not later than six months from October 13, 2016,” read the statement in part.

The regulator said the extension was done in the interest of the Bank’s investors and the general public.

“The appointment was carried out in the interest of the bank’s depositors, creditors and members of the public. Since the appointment, progress has been made towards a resolution of the bank’s receivership with the objective of safeguarding the interest of Depositors creditors and the wider public interest,” the Central Bank said.

The announcement piles more pressure on IBL directors following a new suit in which the directors face a freeze on their assets as the regulator moves to help the lender recover from a Sh45 billion loss that sent the lender into receivership.

Reports reveal that the assets were stolen through a well-orchestrated scheme, organised by the late Imperial Bank Founder and Managing Director, Abdulmalek Janmohamed.

CBK Governor Patrick Njoroge said in an earlier statement that the regulator is doing a forensic audit and those found culpable shall face the wrath of the law.

CBK is currently moving to seize all the known property and assets of stakeholders and directors in Kenya.

KDIC was appointed to take over the management of the bank on October 13, 2015 due to unsafe and unsound practices.

Since the lender was put under receivership, depositors have accessed a portion of their money as resolutions continue.

As of July 2016, Imperial Bank depositors were able to access up to Sh1.5 million while NIC Bank absorbed the majority of Imperial Bank Limited’s staff and branches.

 

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