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Kenya Deposit Insurance Corporation's Acting Chief Executive Officer Mohamud Ahmed said they would continue to work closely with CBK and the banking industry to mitigate possible failures/FILE

Finance

Chase Bank can take fixed deposits, resume lending

Kenya Deposit Insurance Corporation's Acting Chief Executive Officer Mohamud Ahmed said they would continue to work closely with CBK and the banking industry to mitigate possible failures/FILE

Kenya Deposit Insurance Corporation’s Acting Chief Executive Officer Mohamud Ahmed said they would continue to work closely with CBK and the banking industry to mitigate possible failures/FILE

NAIROBI, Kenya, Aug 17 – Barely five months after being placed under receivership, Chase Bank has received Central Bank of Kenya’s approval to start taking fixed deposits and resume lending.

This is part of the bank’s turnaround efforts in recent months established to save the medium sized lender that is now managed by Kenya Commercial Bank (KCB).

“By taking in new deposits at market rates, customers will have more lending opportunities while the generation of much needed income to support the full recovery of Chase Bank will gain momentum,” says an official statement from the bank.

Other moves made by the bank since its reopening includes allowing small depositors to access up to Sh1 million, activating automated teller services and real-time gross settlement.

Additionally, there has been limited lending for trade finance services up to Sh5 million, VISA services and the restoration of correspondent banking by Deutsche Bank, one of the largest banks in the world.

“The move marks a major milestone in the turnaround efforts of the bank signalling that most of the major issues under resolution have been addressed, paving the way for full resumption of banking services to all customers.”

The bank additionally boasts of having recorded improved inflows which are in excess of Sh10 billion, with thousands of new customers coming on board.

“With the active support of our customers and the relevant stakeholders, we have done what we came here to do: we have reopened the bank, stabilized its operations, renewed confidence in the bank and now we are on the final phase before successfully handing over. I believe a good job has been done so far based on our mandate from Kenya Deposit Insurance Corporation,” said Paul Russo, Chase Bank’s receiving manager.

The move follows an announcement by KCB saying that it would soon finish its assignment, allowing the receivership process to move to the next phase of recapitalizing the bank and finding a strategic partner to acquire a majority stake.

Kenya Deposit Insurance Corporation’s Acting Chief Executive Officer Mohamud Ahmed said they would continue to work closely with CBK and the banking industry to mitigate possible failures.

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“In the unlikely event of another failure, KDIC will resolve it promptly for the benefit of depositors, creditors and the general public. We are closely monitoring Chase Bank with a view to resuming full services and wish to thank the depositors for their continued support,” said Ahmed.

Central Bank put the bank under statutory management for a year due to what it termed as unsafe financial conditions.

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