NAIROBI, Kenya, Oct 21 – Central Bank of Kenya (CBK) Governor Patrick Njoroge says a report on Imperial Bank which was placed under receivership will be ready in a week’s time.
Njoroge says the Kenya Deposit Insurance Corporation (KDIC) that is currently managing the bank is conducting an investigation on the inappropriate business practices that will determine the next course of action.
Some of the inappropriate practices Njoroge highlighted include loans granted outside established procedures.
“The Board of Directors of Imperial Bank came to us and provided evidence of inappropriate business practices and we had to jump in fast in a bid to protect the investors and depositors,” Njoroge said at a news conference.
The bank had about 53,300 depositors with Sh48 billion in deposits as at September 2015 and assets worth Sh62 billion.
“We cannot reveal other inappropriate business practices until the report is done to verify the extent of the damage,” he said adding that CBK is doing all it can to bring the bank back to business as soon as possible.
He says Imperial Bank’s situation is unique assuring that Kenya’s banking sector remains safe and stable with ample liquidity in the market.
He also raised concerns over the quality of Imperial Bank external auditors warning that they risk sanctions if found guilty of conducting unsound business with the bank.
“There are also concerns on our own quality of supervision, it’s important to find out also from our end how we missed it, action will be taken as we seek to strengthen our supervision,” he added.
Imperial Bank Limited was placed under receivership for a year owing to what the CBK termed as unsafe or unsound business conditions.
Due to the receivership, the bank’s normal operations are suspended except for the collection of loan re-payments or any other payments into the bank.
Founded in 1992, Imperial Bank was ranked seventeenth on total customer deposits at 1.8 percent of total industry.
It was also ranked position seventeen in the country in terms of core capital at Sh6.5 billion at the end of the 2014 fiscal year.
Additionally, Imperial Bank’s gross advances gave it the seventh slot with 1.6 percent of the total industry.
The CBK also placed Dubai Bank under receivership in August this year.