Five years after Chase Bank went into receivership, the Central Bank of Kenya (CBK) has today given the green light for the bank to be liquidated. The decision followed a recommendation from Chase Bank’s receiver-manager, the Kenya Deposit Insurance Corporation (KDIC), to liquidate the lender.
According to a statement released by the Central Bank of Kenya, KDIC in a report said, “considering the weak status of financial position, liquidation is the only feasible option”.
CBK agreed to the recommendation as it is in line with the laws of Kenya to protect the interest of Chase Bank’s depositors, its creditors, and the wider public interest.
Chase Bank was placed under receivership on 7th April 2016, after it ran into financial difficulties, leaving its depositors and creditors at a loss. CBK appointed the Kenya Deposit Insurance Corporation (KDIC) as receiver for Chase Bank to safeguard the interest of the bank’s depositors, creditors and members of the public.
KDIC appointed KCB Bank Kenya Limited as Manager of Chase Bank Limited (In-Receivership) on 20th April 2016. The appointment enabled 97% of Chase Bank’s depositors (with less than KSh1 million in each of the accounts) to access their funds in full.
In August 2018, 75% of the value of deposits and 75% of the value of assets at Chase Bank were transferred to SBM Bank Kenya Limited after a transparent Expression of Interest process.
KDIC continued overseeing the remaining 25% of the value of deposits along with other assets and liabilities that remained in Chase Bank Limited (in receivership). On 7th April this year, KDIC submitted a Receiver’s report to the Central Bank of Kenya, proposing that the troubled lender be liquidated.