Imperial Bank depositors take out Sh3 billion via NIC window
What you need to know:
Small business owners have particularly suffered from the long wait for their money, having lost their working capital in the lockdown even as the receiver managers demanded that they continue servicing the loans.
Imperial Bank’s owners went to court and obtained an order stopping any dealing in the bank’s assets, arguing that the move would put the lender on the path to liquidation.
Imperial Bank’s depositors withdrew Sh3 billion in the two weeks since its reopening under NIC Bank, the receiver manager has said.
NIC managing director John Gachora said that more than 5,000 customers had opened claim accounts with the bank since July 27, and that foreign-based customers, especially in Europe, were expected to open more in the coming weeks.
“We have disbursed about Sh3 billion so far, opened over 5,000 accounts and continue to offer close support to depositors of Imperial Bank Limited in Receivership (IBLIR),” Mr Gachora said last Thursday, adding that the numbers are expected to increase once the European summer break is over.
The depositors, who are mostly business people, have been allowed to withdraw up to Sh1.5 million each from their accounts during the second phase of the payment plan.
Imperial Bank customers were initially allowed to withdraw up to Sh1 million when the lender first opened under the management of KCB and DTB.
Some 44,300 customers of the collapsed bank with Sh1 million or less, who accounted for 89 per cent of the depositors, were allowed full access to their money in the first phase of the payouts through KCB and DTB.
Once the additional Sh1.5 million is paid out through NIC, 1,400 customers will be added to the list of those who have had full access to their savings, taking the total to 45,700 or 92 per cent of all Imperial Bank’s depositors.
Small business owners have particularly suffered from the long wait for their money, having lost their working capital in the lockdown even as the receiver managers demanded that they continue servicing the loans.
Mr Gachora said the funds being used to pay depositors in the second phase of the payment plan come from the liquidation of Imperial Bank’s Treasury Bills, as per the plan agreed with shareholders.
The Central Bank of Kenya (CBK) closed Imperial Bank on October 13, 2015, following discovery of massive fraud at the mid-tier lender, which at the time held Sh58 billion in customer deposits.
Court order
The CBK and the Kenya Deposit Insurance Corporation (KDIC) appointed NIC to steer the refunds process, with the ultimate goal of taking over some deposits, assets and liabilities of Imperial bank.
NIC has said that money paid into the accounts opened by the collapsed bank’s depositors would not be subject to any fees for a year, and that the depositors would be entitled to free cheque books and RTGSs for the period.
The plan is to eventually liquidate Imperial Bank in order to generate enough money to pay large depositors with more than Sh2.5 million in their accounts, but this has been held up by a court case filed by the bank’s shareholders.
Imperial Bank’s owners went to court and obtained an order stopping any dealing in the bank’s assets, arguing that the move would put the lender on the path to liquidation.
“Compensation of large depositors is dependent on the court case… such disposals will be necessary to build funds with which the big depositors will be paid,” said Mr Gachora.
Cumulative payout
The central bank has previously said that liquidation would enable the depositors access about 40 per cent of any amounts above Sh2.5 million, leading to a cumulative payout ratio of 59 per cent for all verified deposits.
The KDIC has said that even though NIC is the one handling all new claims for cash, depositors who had submitted theirs earlier through KCB or DTB and have yet to claim their money will still do so through the two banks.
