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End of long wait as Imperial Bank customers access Sh8b

Zachary Ochuodho @zachuodho

Kenya Depositors Insurance Corporation (KDIC) has started processing the disbursement of Sh8 billion which constitutes a 12.7 per cent of depositors fund in the collapsed Imperial Bank Ltd (IBRL).This brings the total amount paid to depositors to 35 per cent since the process started. This in essence constitutes nearly 93 per cent of the depositors.

Central Bank of Kenya (CBK) announced the appointment of KCB Bank Kenya as an agent of Kenya Deposit Insurance Corporation (KDIC) – the IBLR receiver manager – to disburse the funds to the depositors on December 11.

KCB had presented a binding offer to CBK in respect to release of depositors funds and verification of loans, which the regulator accepted. The execution of the offer has paved the way for the verification of loans and controlled access to deposits.

Mohamud Ahmed Mohamud, KDIC chief executive officer, said the Sh8 billion being disbursed is part of the money the individuals deposited in the Imperial Bank Ltd.

He said prior to the 12.7 per cent disbursement, NIC Bank, Diamond Trust Bank and KCB Bank were appointed to act as the agent of KDIC and processed Sh18 billion.

“We are discussing with KCB Bank Kenya to commence verification of the assets with a view to identifying which ones are sound so that they pay the remaining amount which is Sh68 billion,” Mohamud said.

Liquid cash

He said nearly Sh18 billion liquid cash belonging to the depositors had been disbursed by last year and KDIC is now working with KCB Bank to get the liquid cash and assets worth Sh55.25 billion which have not been disbursed. Mohamud said KCB Bank Kenya, which is acting as the agent, has finalised the process of settling claims by depositors of collapsed bank.

He said depositors claiming funds  for  the  first  time through KCB Bank are required to open an account with any of its  branches and to complete a  claim  form  with assistance of bank officials who will forward the same to IBLR for processing.

According to KDIC, the binding offer outlines that KCB Bank will complete the loan verification  process within the first quarter of 2019. The loan verification process is expected to result in further recoveries for eligible depositors of IBLR.

The depositors who are eligible to get the deposit balances remaining at IBLR can access the money from any of the KCB branches across the country. Mohamud also revealed plans to adopt Risk Based Premium where commercial banks and microfinance institutions with high risk will be charged more. The risk-based system will be introduced within two years. The risk-based system will allow banks to realign business strategies to the new model.

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