The Central Bank has approved the liquidation of Chase Bank Limited (In-Receivership) and appointed Kenya Deposit Insurance Corporation (KDIC) as its liquidator.
Chase Bank was placed under receivership on April 7, 2016, under the Kenya Deposits Insurance Corporation (KDIC) with an estimated Ksh 4.8 billion of bondholders funds.
In a statement issued Friday, the central bank said this is after KDIC’s report recommended to them that CBK recommending that CBLIR be liquidated.
“The report indicates that considering the weak status of CBLIR’s financial position, liquidation is the only feasible option,” the statement reads.
As a result, according to CBK’s assessment, the recommendation by KDIC, “considered that liquidation would facilitate the orderly resolution of the residual assets and liabilities of CBLIR in accordance with the Laws of Kenya, to protect the interest of CBLIR depositors, its creditors, and the wider public interest.”
KDIC is a statutory institution established under the Kenya Deposit Insurance Act, 2012 (KDI Act, 2012).
The Corporation is mandated to provide a deposit insurance scheme for customers of member institutions, to provide incentives for sound risk management and generally promote the stability of the financial system and prompt resolution.
Further, KDIC protects depositors against the loss of all their deposits or bank balance in the unlikely event of a bank failure.
KDIC has been managing 25 per cent of the value of deposits along with other assets and liabilities that remained in CBLIR following the transfer of 75 per cent of the value of assets transferred to SBM Bank Kenya Limited (SBM Bank), a subsidiary of SBM Holdings Limited.