Implications of Chase Bank Receivership on clients
The Central Bank of Kenya (CBK) has today, appointed the Kenya Deposit Insurance Corporation (KDIC) as a receiver for Chase Bank Limited for one year.
According to a press release by CBK, the appointment of KDIC as a receiver for Chase Bank Limited has been carried out in the interest of its depositors, creditors and members of the public.
The topic of Chase Bank has been trending on social media since yesterday. This led to people withdrawing their moneys from the bank in panic. This article on Bloomberg, states that the move by CBK was due to the mass deposit withdrawals on Wednesday 6th. This panic was triggered by reports of insider loans that were not reported on their audits, causing a restatement of their financial results. The restatement revealed a loss of 8bn lent to directors.
This morning, Kenyans awoke to a full page advert on the leading dailies of the appointment of a new board chair, Muthoni Kuria. Shortly after, CBK announced the receivership.
Chase bank was one of the few banks that supported startups. They were even awarded the overall best company to work for in 2015. Their tagline was ‘The Relationship Bank’, thus attracting more customers.
The people hard hit by this whole situation are the entrepreneurs who were banking at Chase Bank. Jokes aside, we are talking about businesses that have now stalled due to their moneys being frozen. Some are saying it is like a long term investment, but the reality is people have been inconvenienced.
Customers with questions have been advised to call the KDIC on the following Tel. Nos. 020-6677000 or 0709 043000.
People had different views on the issues. Kennedy Kachwanya, of BAKE says in a Facebook post that Chase Bank case came to the public domain when Bloggers wrote stories about the issue at the bank. He is of the opinion that the CBK Governor has so far been more reactive than proactive.
Chase Bank is the third lender to be placed under receivership since Patrick Njoroge was appointed as governor of the central bank in June 2015. Imperial Bank is one of the other two that was placed under receivership on October 13th, 2015.
Many have mixed opinions on the responsible use of the social media. Here are some of the discussions.
— nazznaomi (@missnanalittle) April 6, 2016
— Mwanaisha Chidzuga (@IamIshaChidzuga) April 7, 2016
A few years back, some CEO in Rwanda gave insider loans to family that exceeded bank capitalization, he got 20 years in jail #chasebankkenya
— Tosh (@cgitosh) April 7, 2016
— Diana Mulandi (@diana_mulandi) April 7, 2016
With what KOT have done with #chasebankkenya.Any company out there should be worried of Negative publicity! It can END a business.
— Ben Maina (@macketer) April 7, 2016
Even though people should use social media more responsibly, it has become an avenue for citizens to call public offices to accountability. The real question that this whole situation begs is, why is the culture of corruption is so rampant in Kenya? People get into positions of power, then start amassing wealth at the expense of the masses. Not to mention the number of corruption scandals and the commissions of inquiries that have been set to investigate them. But that is a whole-nother post, so let me let it rest for now.