KCB Bank Kenya has commenced payment of funds to remaining eligible depositors of Imperial Bank Limited (IBLIR) which is in receivership.
The exercise will see depositors approved by the receiver manager–Kenya Deposit Insurance Corporation (KDIC), get partial access to their bank balances.
On May 22, 2020, the Central Bank of Kenya (CBK) announced the acquisition of assets valued at Sh3.2 billion and assumption of liabilities of the same value of IBLIR by KCB Bank, effective June 2, 2020.
Effectively, IBLIR depositors will be paid a total of Sh3.2 billion (equivalent to the total assets acquired by KCB) over a period of four years.
To date 93 per cent of eligible depositors have been fully paid.
This is the first payment as scheduled under the transaction—a part asset transfer—that commenced in 2019.
The payments to eligible depositors were to be made as follows; 12.5 per cent on completion of signing of the agreement; 12.5 per cent on the first anniversary of the signing; and 25 per cent each on the second, third and fourth anniversaries respectively.
Subsequently, the depositors will have cumulatively recovered 37.3 per cent of the deposits since 2015 when payments were commenced.
“This is significant progress in our efforts to ensure that Imperial Bank depositors receive their long-awaited dues,”KCB Group CEO and MD Joshua Oigara said in a statement, Friday.
“We remain committed to support the recovery of funds and we are optimistic that these efforts will be a success in the fullness of time,” Oigara added.
IBLIR is a privately owned commercial bank.
Founded in 1992 as a finance and securities company, IBLIR converted into a fully-fledged commercial bank in January 1996.
It was placed under receivership on October 13, 2015 due to inappropriate banking practices and the KDIC was appointed by CBK as the receiver.