Kenya’s Central Bank Governor Dr Patrick Njoroge has on Sunday evening said that CBK will from Monday avail financial support to any bank that faces liquidity challenges not caused by faults of their own.
The Central Bank on Thursday placed Chase Bank under Receivership, raising fears and anxiety over the health of the whole banking sector. Since then, there has been massive capital flight from the smaller banks as depositors flew to seek safer grounds. CBK said that it hopes the support will bring calm and reduce the anxiety in the Banking industry.
Also Read; “Chase Bank Receivership is a clean up exercise” says President Kenyatta
However, the bank indicated that firm action will be taken against the senior managers who mismanaged depositor’s cash for their own personal interests. The CBK said that the financial support facility is sufficient and will also be accessible to micro finance institutions.
“We have also observed people trying to move from some particular lenders. The Banking system cannot sustain a run on deposits on contagious factors outside the Banking industry” Said CBK in a statement.
Central bank also said that they were in negotiations with Chase bank shareholders and possible local and international suitors to work out modalities to reopen the bank. But noted that this will be determined by how quick the depositors will access their funds.
