Counties that deposited Sh835m in Chase Bank for perks named
Senator Billow Kerrow, chair of the Senate Committee on Finance Budget and Commerce. PHOTO | FILE
Eight counties had deposited Sh835 million in Chase Bank before the mid-sized lender was placed in receivership, a Senate report revealed.
Nairobi, Kisii, Machakos, Kilifi, Uasin Gishu, Kericho, Narok and Trans Nzoia counties held accounts at the lender on diverse dates from September 2013 to February 2016.
The Central Bank of Kenya (CBK) took over Chase Bank in April after a run on its deposits raised fears it would be unable to repay customers.
“Six or seven counties, including Machakos, Trans Nzoia and Uasin Gishu, have huge deposits in Chase Bank. The total amount held at the bank is Sh835 million,” Billow Kerrow, who chairs the Senate Committee on Finance Budget and Commerce, noted.
“This is the money that they transferred from their operations account at the CBK to Chase Bank and other commercial banks.”
Kisii topped the list of depositors at Chase Bank with Sh260 million for mortgage and car loans for members of the county assembly (MCAs), according to data tabled in the Senate by Mr Kerrow.
Nyandarua County Assembly deposited Sh210 million for its mortgage and car loan fund. Machakos county assembly also deposited huge sums of money for onward lending to MCAs for purchase of cars and houses.
Machakos deposited a total of Sh121.6 million for the purchase of top of the range vehicles for the MCAs between February 2014 and January 2015.
The county assembly also deposited Sh71.6 million between February 2015 and February 2016 for the county assembly housing scheme and another Sh10.7 million from the executive, pushing its total deposits to Sh203.9 million.
Kilifi had Sh88.9 million in the troubled lender with some deposits having been made four days before the lender was placed under CBK management. Uasin Gishu had Sh12.8 million in Chase Bank.
Kericho banked Sh49.9 million on February 8, two months before it was temporarily shut. The money was meant for purchase of houses for the governor, Paul Chepkwony, his deputy, county executive members and their staff.
The CBK has expressed hope that Chase Bank would be out of receivership sometime during the first quarter of 2017.
The bank was the third medium-to-small lender to be closed in Kenya over a period of nine months, rattling investors in the sector, where the level of bad loans crossed the Sh200 billion mark.
Chase Bank reopened in May after KCB Group was appointed to manage it.
Last Tuesday, CBK governor Patrick Njoroge said both foreign and local investors were interested in the lender but did not elaborate, apart from saying they were looking at all possible ways of bringing Chase Bank out of receivership.
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