CBK rolls out fund to cushion banks

April 11, 2016 9:11 am
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CBK Governor Patrick Njoroge said they are hoping to deal with fear and anxiety that are making depositors act in an irrational way that bring down institutions that are otherwise solvent/XINHUA FILE
CBK Governor Patrick Njoroge said they are hoping to deal with fear and anxiety that are making depositors act in an irrational way that bring down institutions that are otherwise solvent/XINHUA FILE

, NAIROBI, Kenya Apr 11 – Central Bank of Kenya (CBK) has set aside a facility to cushion banks experiencing liquidity pressure in aim to restore depositors’ confidence.

CBK Governor Patrick Njoroge said they are hoping to deal with fear and anxiety that are making depositors act in an irrational way that bring down institutions that are otherwise solvent.

“From Monday, we will avail a facility to any financial bank or micro finance institution that comes under liquidity pressures arising from no fault of their own. We will avail it facility for as long as necessary to return stability and confidence to the Kenyans financial sector,” Njoroge explained.

Overview

The CBK Governor said that he is concerned by the hysteria generated from the speculation and rumours on social media that led to the closure of Chase Bank last Thursday

Njoroge also assured Kenyans that CBK is undertaking measures to streamline the financial sector in order to secure investments and create a fair and conducive environment for investment

“In terms of the amounts, it will be sufficient for the institutions to stand. We don’t have an upper or lower limit,” said the CBK boss when asked about the sum of the facility.

The banking sector regulator emphasized that he has confidence in rigor and strength of the sector and will continue to monitor and oversee full compliance of the existing regulations.

The CBK Governor said that he is concerned by the hysteria generated from the speculation and rumours on social media that led to the closure of Chase Bank last Thursday.

He further dismissed a list circulating in the social media naming banks facing eminent closure.

Njoroge also assured Kenyans that CBK is undertaking measures to streamline the financial sector in order to secure investments and create a fair and conducive environment for investment.

“We are trying to improve the tool kit that is available to us. We never had a problem with hysteria but now we are seeing the damaging nature of the negative reports. We are sure once the depositors see this they will be calm. This is not unique to Kenya when it happened to the US they came up with a facility to deal there situation,” he said.

Njoroge further said they were in negotiations with shareholders and other international suitors to ensure that Chase Bank is re-opened as soon as possible.

“Our objective is to open Chase Bank as soon as possible; I can say that the conversation with shareholders and possible suitors are on-going. We can look at the institutions and say it’s about the conclusion to the negotiations. No, no, no… it’s not about the negotiations, it’s about the depositors those that have money in these institutions. That’s our obligation,” he stressed.

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