Central Bank of Kenya (CBK) has put the final nails on the coffin of collapsed Charterhouse Bank (CHB) Limited by appointing Kenya Deposit Insurance Corporation (KDIC) as its liquidator.
This follows the statutory management report submitted by the statutory manager on May 6, 2021, recommending that CHB be liquidated.
CBK reasons for liquidating Charterhouse
The report indicates that given failure to adhere to several sections of the Banking Act by the collapsed lender and its inability to address them, liquidation was the only feasible option.
CBK said liquidation would facilitate the orderly resolution of the assets and liabilities of CHB to protect its depositors, creditors and the public.
CHB was set up in 1996 after taking over the operations of Middle East Kenya Finance Limited. The institution then converted to a full-fledged Bank in 1998.
It had ten branches in Nairobi, Kisumu and Mombasa, 8 of these branches at the then Nakumatt Supermarket stores, an associate of CHB.
By 2006, CHB was positioned at 31 out of 41 with an asset base of KSh 4 Billion and a market share of 0.55%. It had 428 loan accounts valued at KSh 2.9 Billion and 4,699 deposit accounts valued at KSh 2.9 Billion.
Its equivalent ranking at the end of 2020 with the 2006 asset base would be the smallest of all banks.
On June 23, 2006, CBK placed CHB under statutory management after it violated sections of the Banking Act relating to lending, the accuracy of returns submitted to CBK and failure to obtain account opening documentation for many customers.
The placement of CHB under statutory management and takeover by CBK was done in the interest of depositors, creditors and the public.
The deposit protection agency is expected to release information about the liquidation of CHB and payment of depositors in due course.