Kenya central bank concerned about lack of solution for Imperial Bank

The Central Bank of Kenya said on Friday it was concerned that the shareholders of privately owned Imperial Bank were not acting quickly enough to come up with a proposal to revive the mid-sized lender.

The Central Bank of Kenya (CBK) ordered privately owned Imperial Bank to be put in receivership last month after Imperial’s board alerted it to malpractices at the lender.

The regulator appointed government agency Kenya Deposit Insurance Corp (KDIC) to manage Imperial Bank for up to 12 months.

The central bank has said Imperial is still viable and shareholders were considering a proposal to inject capital to reopen it.

“The proposal includes an injection of new capital by shareholders, the conversion of a percentage of large deposits to equity, and recovery and collateralization of fraudulent loans,” the CBK said in a statement on Friday.

“The CBK notes with concern the delay by shareholders to provide adequate assurances for the implementation of this proposal, and urges a quick resolution of this matter.”

Imperial Bank was the second Kenyan bank taken over since August, when Dubai Bank Kenya Ltd was put in receivership after liquidity problems.

The central bank said this week it was considering harsher penalties for commercial banks that flout the rules and it may publicise enforcement actions that it takes against errant banks. (Reuters)

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