NIC hands Imperial clients Sh5bn in under one month

Large depositors of the collapsed Imperial Bank between December 28 and last week withdrew Sh5 billion after the deposit insurer reopened the compensation window for large cash holders of the collapsed mid-tier lender.

NIC, which is co-managing the process, has paid as much as Sh300 million to individual depositors in the latest tranche of compensation according to insiders familiar with the matter who are not authorised to speak to the media.

“We have paid as much as Sh5 billion under this schedule,” said the official.

At the time of closure in October 2015 the troubled bank officially removed Sh58 billion from circulation, meaning only a small fraction has been accessed.

The renewed compensation process will continue until January 31.

In the new window Kenya Deposit Insurance Corporation (KDIC) is paying verified depositors up to a maximum of 10 per cent of their balances.

“Verified depositors will be able to access additional funds of up to a maximum of 10 per cent of their remaining deposits, subject to a minimum of Sh200,000 or the actual deposit amount for balances below Sh200,000,” said Central Bank of Kenya (CBK) in a statement announcing the payout.

Depositors are getting the funds through NIC Bank as was the case with second disbursement in July this year.

During the last phase of payment for the depositors who are mostly businesspeople, they were allowed to withdraw up to Sh1.5 million from their accounts.

Under the initial phase depositors were allowed to withdraw up to Sh1 million when the lender first opened, with KCB and DTB doing disbursement.

READ: Imperial Bank depositors take out Sh3bn via NIC window

Some 44,300 customers of the collapsed bank with Sh1 million or less, who at the time accounted for 89 per cent of the depositors, were allowed full access to their money through the two Tier II banks.

The second phase of the deposit repayment in August last year saw depositors withdraw Sh3 billion in the two weeks through NIC Bank.

The listed NIC said at the time more than 5,000 customers had opened claim accounts with the bank since July 27 last year.

Once the additional Sh1.5 million was paid out through the bank, it was expected that 1,400 customers would be added to the list of those with full access to their savings, taking the total to 45,700 or 92 per cent of all depositors.

The repayment process has come as relief for Imperial Bank depositors, particularly small business owners who have suffered from a long wait, having lost their working capital in the lockdown.