Chase Bank depositors allowed to check balances

Nairobi. After successful deliberations among technocrats in Central Bank and KCB, the customers of Chase Bank will heave a sigh of relief by being allowed to check their balances and receive an update on services that will be offered once it reopens.

The Sunday Nation has learnt that KCB formally took total control of the lender on Friday and has been testing branch systems in preparation for the reopening.

“CBK met with shareholders and the management of Chase on Thursday and Friday where agreements were signed to give us total control. The staff has also been recalled but the only changes expected are at top level management,” said a source at KCB.

Also being worked out is the complicated matter of how to pay bond holders who are owed Sh4.8 billion raised by the bank last year through the Nairobi Securities Exchange (NSE), which sources say contributed to the prevention of the outright acquisition of the mid-tier lender by KCB.

CBK has also been trying to recover Sh13.62 billion from Chase Bank shareholders that was lost through insider lending before the institution collapsed in order to give it adequate liquidity before Wednesday.

A rush by customers to withdraw their deposits was the reason why CBK placed the bank under receivership on April 6 as it could not sustain the liquidity pressure.

In the arrangement announced by CBK on Wednesday last week, the Kenya Deposit Insurance Corporation - which was the receiver manager - placed KCB as the manager of the bank with authority to carry out its business and manage its assets and liabilities. During his weekly briefing CBK Governor Patrick Njoroge placed Sh1 million as the maximum amount depositors will be allowed to withdraw once the bank reopens. (NMG)