The Central Bank of Kenya (CBK) has approved the liquidation of collapsed Imperial Bank, setting the stage for the sale of the lender’s remaining assets.
Imperial Bank collapsed six years ago with money belonging to depositors, bondholders and creditors and has been under receivership of the Kenya Deposit Insurance Corporation (KDIC).
During the six years, most of the money has been used to pay depositors, including the sale of Sh3.2 billion assets and liabilities to KCB Bank #ticker:KCB last year.
CBK says only 4,300 depositors, representing eight percent, are yet to get back their money in full.
The banking regulator appointed KDIC to liquidate the bank and process payment for the remaining depositors, creditors and bondholders.
“Following four payment disbursements, 45,700 out of the 50,000 (92 percent) depositors have accessed their funds in full,” CBK Governor Dr Patrick Njoroge said on Thursday.
“KDIC will release information about the liquidation of IBLIR and payment of depositors in due course,” he said.
The lender was placed under receivership on October 13, 2015, after CBK learnt of massive frauds committed by the managers or administrators through illegal transactions, which milked the bank of Sh34 billion.
A forensic audit report that was ordered by the regulatory is yet to be released.
The liquidation of Imperial Bank comes just months after CBK formally cancelled the Chase Bank licence in April, paving the way for its winding up. The lender had been put under receivership on April 7, 2016.
Other banks that have collapsed are Dubai, Prudential, Trust, Euro and Charterhouse.
The difficulties of dealing with collapsed banks have inspired reforms in the sector, which has seen the execution of bargains and fire sales for several lenders. They include the sale of National Bank (NBK) to KCB Group, Jamii Bora to Co-operative #ticker:COOP, Transnational to Access Bank, and Mayfair to Commercial International Bank.