Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

Finance

CBK rolls out fund to cushion banks against depositor flight

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.

NAIROBI, Kenya Apr 12 – Central Bank of Kenya (CBK) has set aside a facility to cushion banks experiencing liquidity pressure with the aim of restoring 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 may 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 the facility for as long as necessary to return stability and confidence to the Kenyans financial sector,” Njoroge explained.

“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 with the 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

Advertisement. Scroll to continue reading.
Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...