Chase Bank workers resume duty ahead of re-opening Wednesday

What you need to know:

The staff reported to its 62 branches countrywide for the first time since April 7 and spent the day testing its core banking system.
Chase will upon reopening offer limited services, including allowing its depositors to withdraw a maximum of Sh1 million from their accounts.

Chase Bank workers resumed work Monday in preparation for re-opening of the collapsed lender Wednesday under the management of Kenya Commercial Bank (KCB).

The approximately 1,400 staff reported to its 62 branches countrywide for the first time since April 7 and spent the day testing its core banking system.

The Central Bank of Kenya (CBK) last Wednesday announced that it had picked the KCB to manage Chase for an unspecified period, during which services to customers will be gradually increased.

“All Chase employees have resumed duty today in preparation for the bank opening on Wednesday,” Joshua Oigara, KCB’s chief executive officer, said on Twitter.

Mr Oigara added that Chase employees, who hold a 4.3 per cent stake in the lender, would receive their April salaries “in the normal way”, offering relief to the staff whose March salaries remain locked up in the bank.

The Business Daily has established that the back-to-work milestone follows two meetings that KCB management team held with Chase Bank’s staff at their Riverside and Westlands offices on Thursday and Friday last week.

This engagement spilled over into the weekend as representatives from both banks remained holed up in several branches testing their system in preparation for the re-opening.

Chase will upon reopening offer limited services, including allowing its depositors to withdraw a maximum of Sh1 million from their accounts.

This withdrawal ceiling will see 167,290 account holders (equivalent to 97 per cent) receive their funds in full while those with cash above this amount are set to receive their money “in a structured manner” in future, the CBK said.

READ: KCB to take over management of Chase Bank

The bank’s mobile and ATM services as well as the Internet banking platform are also set to be revived immediately while issuance of new loans will be limited to individuals who make fresh deposits.

Individuals with existing deposits will, to begin with, not be able to access loans until KCB undertakes to verify the collateral and documentation upon which existing loans were issued.

“Part of the manager’s role is to follow up on full documentation on all facilities issued. All outstanding loans and transactions will be reviewed and communication shared upon re-opening,” said Mr Oigara.

He was speaking during a Q&A session on Twitter Monday morning where he also explained that cheque clearing facilities is one of the services that will be reintroduced at an unspecified later date.

Chase Bank’s agents are also expected to become operational by May.

The lender collapsed on April 7 following failure to pay panicky customer’s deposits after it ran out of cash amid reports of unlawful internal transactions by its top managers.

KCB last week beat eight other bidders, including Chase Bank’s current shareholders, two foreign institutions and three local banks, to clinch the deal to manage the lender for a fee.

KCB is expected to commence a due diligence on Chase Bank in about three months, with the aim of acquiring a majority stake in the lender which has cut a niche for itself in the SME sector.

“We had given a proposal but the acquisition details have not been discussed,” Mr Oigara said on Twitter.