This follows a joint agreement Central Bank of Kenya signed with Kenya Commercial Bank (KCB) and Diamond Trust bank (DTB) to provide Imperial Bank access to their deposits.
According to the agreement KCB and DTB will in the immediate future pay about 44,300 Imperial Bank depositors who have less than Sh1 million in deposits while the 5,700 depositors with more than Sh1 million in the account will access just Sh1million.
“The remaining deposits and loans would be subject to a due diligence review by KCB and DTB which would inform what portions could be transferred to both banks and under what terms. An announcement on the forward will be made upon completion of this exercise expected by end of March 2016,” says CBK Governor Patrick Njoroge.
Over the next few days KCB and DTB will put in place mechanisms through which Imperial Bank depositors can file their claims at any KCB or DTB branch in the country.
Once filed, a response will be provided within three business days and a payment made if the claim is approved.
However the fate of Imperial Bank seems to fatal as Njoroge says he does not know when the bank will be re – opened.
“I have no idea when the bank will be re- opened, I asked the shareholders to give me a credible plan on how they will pump in money, and up to now they haven’t,” he said.
Earlier imperial bank shareholders faulted CBK and the Kenya Deposit and Insurance Corporation (KDIC) over delays in getting the bank back to business.
CBK handed the management and operations of Imperial Bank Limited under the KDIC for twelve months. KDIC has found substantial fraud at IBL but says the bank is still viable for business.
KDIC revealed that there were fraudulent activities of substantial magnitude, and the misrepresentation of IBL’s financial statements. The fraudulent activities include irregular loans granted by the management and in particular violating the limit on lending to a single borrower.
In particular, the irregular loans were a violation of the statutory limit of lending to a single borrower, and inadequate loan loss provisions, thereby overstating IBL’s capital adequacy position.