Depositers to wait longer to access cash as CBK extends Chase bank term in Receivership

Depositers to wait longer to access cash as CBK extends Chase bank term in Receivership
  • Chase Bank (Kenya) Limited was a rapidly developing commercial bank, operating through 62 branches. After being put on receivership, the Bank re-opened with reduced activities on April 27, 2016, managed by KCB Bank Kenya Limited
  • CBK and Kenya Deposit Insurance Corporation (“KDIC”) has invited investors to present an initial Expression of Interest (“EOI”) to take an equity interest in Chase Bank (Kenya) Limited (In Receivership)
  • The Shortlisted Investors will be determined in a fair process using appropriate and objective criteria based on, inter alia, regulatory imperatives and prudential guidelines which will ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of Chase Bank (Kenya) Limited, whilst also mindful of seeking to preserve and develop a sound and innovative banking system in Kenya

The Central Bank of Kenya (CBK) has extended the appointment period of the Kenya Deposit Insurance Corporation (KDIC) as Receiver of Chase Bank Limited (In Receivership) (CBL) for a further six months from Friday April 7, 2017, pursuant to the provisions of Section 53(1) of the Kenya Deposit Insurance Act, 2012. This extension means that depositors will have to endure another six months before they can access their finances fully.

KDIC was appointed on April 7, 2016, to assume the management and control of Chase Bank Limited for a period of twelve months pursuant to the provisions of Sections 43(1), 43(2) and 53(1) of the Kenya Deposit Insurance Act, 2012. The appointment of KDIC was carried out in the interest of the bank’s depositors, creditors, and members of the public.

At the same time, the Central Bank of Kenya (“CBK”) together with the Kenya Deposit Insurance Corporation (“KDIC”) has invited investors to present an initial Expression of Interest (“EOI”) to take an equity interest in Chase Bank (Kenya) Limited (In Receivership) (“CBL” or “the Bank”). CBK and KDIC, the appointed Receiver, are executing their mandates in the matter in accordance with the Laws of Kenya.

The Bank has continued to operate and grow deposits from the date of receivership. This announcement commences a formal process of selecting a preferred investor for the Bank, which it is hoped may be concluded within the next six months. Following the receipt and evaluation of EOIs, a shortlist of qualifying investors (“Shortlisted Investors”) will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Limited.

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‘Notwithstanding the circumstances, the CBK and KDIC have concluded that such activities were not an endemic part of the Bank’s business and that the Bank’s core activities are of merit as a service in Kenya. With improved management, governance and oversight CBL could represent a long term viable banking business,’ read a statement from CBK in part.

Since the appointment of KDIC as Receiver, 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. KDIC will maintain the management, control and conduct of the affairs and business of the institution, exercise all the powers of the institution to the exclusion of its Board of Directors, and work with CBK on an appropriate resolution strategy

 

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