The Competition Authority of Kenya (CAK) has cleared the takeover of troubled Chase Bank by Mauritius-based SBM Holdings, paving the way for depositors to start receiving cash from October.
SBM Holdings last April said it was ready to grant access to the remaining deposits once its acquisition of Chase Bank is cleared by the regulators.
The Central Bank of Kenya (CBK) had earlier given SBM the green light.
“The Competition Authority authorises the proposed acquisition…of certain assets and the assumption of certain liabilities from and of Chase Bank (Kenya) limited (in receivership) by SBM Bank (Kenya) Limited,” said CAK director general Wang’ombe Kariuki in a gazette notice dated June 4 published on Friday.
The CBK earlier said access to the deposits will be spread over a period of up to three years in a move seen as meant to stabilise the bank under its new owner.
SBM Holdings chairman Kee Chong Li Kwong Wing in April said the payout process would start in a maximum of six months.
“We need the approval of Central Bank (to avail deposits) …a minimum of four to six months,” he said.
The bank collapsed in 2016 with deposits of more than Sh100 billion, part of which was returned to small depositors when it was under the care of the CBK.
About 3,100 affected depositors will be seeking to access the cash locked up at the lender.
According to a schedule agreed to by the CBK and SBM, 25 per cent of the deposits will be available immediately Chase Bank starts operations under its new owner. No interest will be payable.
There will be unrestricted usage of another 25 per cent of the sums, which will be held in a savings account and earn interest at a rate of 6.65 per cent per annum.
The remaining money will be held in fixed deposit accounts, earning a similar interest rate and will be paid out to depositors over three years.
SBM, which earlier acquired full ownership of Kenya’s bottom-tier lender Fidelity Bank in 2016, plans to invest an additional $60 million (about Sh6 billion) in Chase Bank having already invested about $26 million (about Sh2.6 billion) in the lender.