The Central Bank of Kenya (CBK) said on Thursday the remainder of Imperial Bank will be liquidated following an external audit that found it was the only feasible choice given the bank’s weak financial position.
The Kenya Deposit Insurance Corporation (KDIC) put forth liquidation recommendations for the lender.
“CBK has assessed the recommendations by KDIC, the external auditor’s report, other pertinent information and considered that liquidation would facilitate the orderly resolution of IBL-IR in accordance with the Laws of Kenya, to protect the interest of IBL-IR depositors, its creditors and the wider public interest,” read the statement in part.
KDIC is a state body that protects depositors in the case of a bank failure.
Depositors and other individuals with claims have been advised to contact the bank through dedicated phone numbers or send an email to firstname.lastname@example.org
To make claims, depositors are required to fill a proof of debt claim form which can be accessed from the KDIC website.
All claimants will have to attach a copy of ID or Passport, account statement, if any, an Original Fixed Deposit Receipt, a passbook or checkbook or ATM card and any other proof of claim for individual claimants.
KDIC policy allows the duration of settlements within two years from the date of commencement of the payment.
The institution is mandated to provide insurance cover for deposit accounts up to a maximum of Ksh500,000 per depositor of a member institution.
And in a case where a depositor has more than one account in an institution, all the accounts are consolidated and paid up to a maximum insured sum of Ksh.500,000.
For companies, a copy of the certificate of incorporation, a Letter of Authority to make the claim signed by the authorized signatories as per the mandates held by the company.
Other requirements will be an original Fixed Deposit Receipt in case of a time/fixed deposit, a passbook or checkbook or ATM card and any other proof of claim are required
CBK ordered the privately-owned bank to be put into receivership in October 2015 after the board of the mid-sized lender alerted it to suspected malpractice.
At the time, putting Imperial Bank in receivership shook confidence in Kenya’s financial sector which has more than 40 foreign and local banks.
The appointment of receivers, who have operated the bank for the past six years, followed soon after the liquidation of a smaller bank.
In June last year, Kenya Commercial Bank Kenya (KCB) acquired some Imperial Bank assets worth Ksh.3.2 billion ($28.37 million) and took responsibility for liabilities of a similar amount, the central bank said.
The central bank said an external audit on the remainder of Imperial, now known as Imperial Bank Limited in Receivership (IBLIR), concluded that liquidation was the only feasible choice.
“Liquidation would facilitate the orderly resolution of IBLIR … to protect the interest of IBLIR depositors, its creditors and the wider public interest,” it said.