NAIROBI : The Central Bank yesterday reassured that the placement of mid-tier Imperial Bank under receivership would not affect the banking industry.
Governor Patrick Njoroge said the lender, which has locked more than Sh58 billion of customer deposits, represents about 1.8 per cent of the sector, and should not be a matter of concern.
The banking sector, he insisted, is “safe and robust”.
“CBK stands ready to use all instruments at its disposal to provide adequate liquidity support to the banking system to ensure its stability and robustness at this time,” Njoroge said in a statement.
The bank was temporarily shut on Tuesday after its board raised concerns over “unsound banking practice”.
The reasons are yet to be made public, but sources at the bank said there have been cases of fraud. Some said a former CEO may have been running a “parallel banking system”.
State-owned Kenya Deposit Insurance Corporation has taken over at the bank , initially for a maximum of one year.
KDIC has consequently appointed Peter Gatere as receiver manager “to carry out the business and manage the assets and liabilities” of the bank.
“KDIC will expeditiously deal with this matter and provide regular and timely updates to the general public,” acting chief executive Jonathan Bett said.
He reassured depositors and creditors KDIC “will do everything within its powers to protect their interests as it undertakes this receivership exercise”.