Depositors in 3 collapsed banks are set to receive KSh200 million from the Kenya Deposit Insurance Corporation (KDIC), after a successful recovery process and sale of assets of the banks currently under liquidation.
The depositors of Euro Bank, Kenya Finance Bank and Dubai Bank will receive the KSh200 million over a one year period. According to KDIC Chief Executive Officer Muhamud Ahmed, the corporation targets a total of 30,000 creditors with a minimum pay out of KSh50,000.
The latest payment now puts the cumulative payments of claimants who will be fully paid to 97% for Euro bank, 92% for Kenya Finance Bank, and 92% for Dubai Bank ltd.
Central Bank of Kenya placed Dubai Bank under statutory management in August, 2015 for one year, with KDIC being the receiver manager. The lender experienced liquidity and capital deficiencies, and breached its daily cash reserve ratio before being put under receivership and thereafter, liquidation.
Kenya Finance Bank has been under liquidation since 1996 and KDIC has completed payment of over KSh500 million to its depositors.
In 2019, KDIC raised the deposit insurance coverage from KSh100,000 to KSh 500,000 so as to protect depositors and also encourage saving in banking institutions. The new limit was an improvement to 20%, up from 8% that had been in place since 1989.
The Kenya Deposit Insurance Corporation (KDIC) is a Kenya government corporation providing deposit insurance to depositors in Kenyan banks and deposit-taking microfinance institutions. It has the powers to guarantee deposits of insured institutions, carry out supervision of insured institutions, partake in problem/failing banks resolution process and liquidate failed/closed financial institutions.
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