The Central Bank of Kenya (CBK) has appointed Kenya Deposit Insurance Corporation (KDIC)to liquidate Imperial Bank that was placed under receivership in 2015.
In a statement on Thursday, CBK said liquidation was the best way to protect the interest of the depositors, creditors, and the wider public interest.
“CBK has assessed the recommendation by KDIC, the external auditor’s report, other pertinent information, and considered that liquidation would facilitate the orderly resolution of IBLIR in accordance with the Laws of Kenya, to protect the interest of IBLIR depositors, its creditors, and the wider public interest. Subsequently, on December 8, 2021, CBK appointed the KDIC as liquidator of IBLIR in terms of Sections 53(2) and 54(1)(a) of the Kenya Deposit Insurance Act, 2012,” said CBK.
On October 13, 2015, CBK appointed KDIC as receiver for Imperial Bank Limited, after the lender went under.
On June 2, 2020, KCB Bank Kenya (KCB) acquired certain assets valued at Ksh3.2 billion and assumed liabilities of the same value of Imperial Bank.
From June 2, 2020, Imperial Bank depositors were to be paid a total of Ksh3.2 billion over a period of four years. Subsequently, the depositors would have cumulatively recovered 37.3 percent of the deposits since 2015 when payments were commenced.
Following four payment disbursements, 45,700 out of the 50,000 (92 percent) depositors have accessed their funds in full.
In September 2020, following the acquisition of certain assets and assumption of liabilities by KCB, CBK required KDIC to appoint an independent external auditor, to carry out a comprehensive audit of IBLIR, based on terms of reference approved by CBK pursuant to Section 24 of the Banking Act. The objectives of the audit were interalia to provide additional basis for further action. KDIC contracted an independent external auditor in May 2021.
The external auditor submitted the audit report to CBK on October 1, 2021. CBK noted a number of gaps in the report, some of which have been subsequently resolved. A number still remain pending, all related to KDIC.
Accordingly, on October 13, 2021, CBK advised KDIC to resolve all the pending gaps in 45 days.
“On December 7, 2021, KDIC submitted the Receivership Report to CBK
recommending that Imperial Bank be liquidated. The report indicates that considering the weak status of IBLIR’s financial position, liquidation is the only feasible option,” said CBK.