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Njoroge, who has been accused by shareholders of sidelining them in the goings of the bank, says so far he has not received a proper plan to re-open the bank/FILE

Kenya

CBK says open to new proposal to revive Imperial Bank

Njoroge, who has been accused by shareholders of sidelining them in the goings of the bank, says so far he has not received a proper plan to re-open the bank/FILE

Njoroge, who has been accused by shareholders of sidelining them in the goings of the bank, says so far he has not received a proper plan to re-open the bank/FILE

NAIROBI, Kenya, Jan 21 – Central Bank of Kenya (CBK) Governor Patrick Njoroge says he is open to new genuine proposals to re-open Imperial Bank Limited (IBL) which is currently under receivership.

Njoroge, who has been accused by shareholders of sidelining them in the goings of the bank, says so far he has not received a proper plan to re-open the bank.

Earlier, Imperial Bank Chairman Alnashir Popat in a press conference stated that there has been no formal response from CBK and the Kenya Deposit Insurance Corporation (KDIC) on a solution to bring the bank back to business.

“We had asked them to inject Sh20 billion. If they say they have Sh10 billion, let them deposit it to CBK and then we can talk,” Njoroge said.

The shareholders had revealed that following the receivership, Governor Njoroge came up with mandatory conditions that include shareholders injecting Sh20 billion capital to the bank.

“When we saw that the shareholders don’t have any proposals we continued with our plan to give depositors access to their money, we have so far paid 30 percent of the 49,042 who were supposed to be paid,” Njoroge said.

In December, CBK sought to pay Imperial Bank depositors about 44,300 who had less than Sh1 million in deposits while the 5,700 depositors with more than Sh1 million in the account were to access just Sh1million.

“In December, we received about 8,476 claims and they were all plaid, as at Wednesday close of business we have received 17,136 claims, we have paid 15,049 valued at Sh5.9 billion, we urge all depositors to make their claims,” Njoroge added.

He says investigations are ongoing and those found culpable will be prosecuted.

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.

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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.

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