In Summary
  • The process for releasing the funds to about 3,100 affected depositors will kick off “in a matter of weeks”, said CBK.
  • The payouts will start after the planned execution and operationalisation of the recent binding offer by the CBK to take over Chase Bank.
  • Chase Bank was placed under receivership on April 7, 2016 following a run on deposits after reports of liquidity problems spread online.

Chase Bank customers will access 75 per cent of the Sh76 billion deposits locked in the troubled lender in staggered phases over a period of three years, regulators announced yesterday.

The process for releasing the funds to about 3,100 affected depositors will kick off “in a matter of weeks”, said Central Bank of Kenya (CBK) governor Patrick Njoroge and the Kenya Deposit Insurance Corporation (KDIC) chief executive officer Mahmoud Mohamed in a joint briefing without giving a specific timeline.

The payouts will start after the planned execution and operationalisation of the recent binding offer by the CBK to take over Chase Bank.

The CBK accepted the offer on January 4, almost a year and nine months after the lender collapsed.

“This is a very good offer for the substantive resolution of Chase Bank,” said Dr Njoroge at a briefing without disclosing the value of the deal.

“It is the first time that a carved out process is being witnessed,” added Mr Mohamed (right).

Under the staggered approach, 18.75 per cent of the deposits will be placed in current accounts operated by the depositors after the deal is operationalised “in a matter of weeks”

Another 18.75 per cent will be placed in savings accounts of the depositors earning 7 per cent interest.

The rest of the 37.75 per cent will be available annually over a three-year period earning 7 per cent interest.

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