CBK to Seek Another Receivership Extension for Imperial Bank
The Central Bank of Kenya (CBK) is set to apply for Imperial Bank’s receivership extension next week to allow the bank to engage further with KCB Group according to the CBK governor.
The CBK and the Kenya Depositors Insurance Corporation (KDIC) this week announced that KCB Group is the leading bidder in taking over Imperial Bank.
“We need more time to get a better deal. The biggest issue now is the valuation of the loans.”
However, it is not exactly clear how much more time CBK is seeking for the extension. “Our lawyers will advise us on this. But of course, it is getting clearer with KCB in the picture,” he asserted.
The upcoming receivership extension will be the fourth that CBK has requested for from the court. The current extension will expire at the end of this month.
The extended receivership period, which is now about three years old since the bank collapsed in October 2015, has negatively affected its depositors in various ways. At the time of its collapse, Imperial Bank was holding more than Sh80 billion of depositors money.
The bank collapsed shortly after Group managing director Abdulmalek Jan Mohammed passed on.
The bank’s shareholders and directors informed the CBK of suspicious undertakings that were going on in the bank. This resulted in the led the regulator placing the bank under receivership as it investigated the suspicious activities.
Imperial Bank had operations across Kenya and Uganda.
Over 78 imperial bank depositors have been denied access to their funds after they were linked to the suspicious transactions that led to the downfall of the bank. The KDIC is investigating the implicated individuals and companies.
KDIC wrote on documents filed in court: “The petitioners are subject to investigations with regard to their financial transactions with [Imperial Bank] and if not found culpable their deposits will be paid out subject to the applicable percentage.”
The petitioners are depositors who have complained that they did not receive their funds when other Imperial Bank customers did.