Imperial Bank to know fate in April CBK

The Central Bank of Kenya has given an April deadline to give the way forward on the fate of Imperial Bank.

Speaking while meeting the Parliamentary committee on Finance, CBK Governor Dr Patrick Njoroge stated that the regulator was close to concluding on a plan to re-open the bank.

Imperial Bank was placed under receivership in October 2015 after the bank’s shareholders brought to the attention of the central bank, a fraud scheme that had seen the bank lose Sh34.5 billion.

At the center of the investigations is the late former managing director Abdulmalek Janmohammed who is said to be the mastermind of the fraud.

According to Dr Njoroge the first step will be to ensure that all depositors at the bank receive their money.

By the 12^th of February Sh6.4 billion had been paid out to depositors. The CBK and receiver manager the Kenya Deposit Insurance Corporation began settling depositors in December 2015 through the Kenya Commercial Bank and DTB.

In the settlement process, depositors with less than a million shillings in the bank were getting their money in full, while those with larger sums were getting their money in instalments.

The central Bank said it has so far received 19,106 claims from depositors. The Sh6.4 billion was paid to 16,9555 of those depositors while 900 claims were rejected and a further 1,200 claims going through further scrutiny.

“We have to verify that some of these accounts are credible and not fronts for other people,” CBK Governor Dr Njoroge said.

By the time of being placed under receivership in October 2015, Imperial Bank had some 44,500 depositors with Sh88 billion in the bank.

Imperial Bank shareholders have however accused the regulator of giving unreasonable, excessive and oppressive demands to re-open the bank.

The shareholders are also opposed to the current payout structure arguing that it has given the two banks access to their client list, which they can use against them in the competitive banking sector.

But in a quick rejoinder, the regulator said it is still open to talks but stressed “we’ve been unable to get acceptance of the plan from shareholders because the plan has to be executable.”

Shareholders had proposed to inject Sh10 billion into the bank, recover assets from recipients of the fraudulent money as well as bringing on board a strategic investor.

“If we re-open it (Imperial Bank) it has to be re opened to stay open. We shouldn’t be in the business of re opening banks for a temporary amount of time then being forced to close it,” he said.