Imperial Bank depositors protest after the bank was put under receivership. The depositors will now have to wait longer for their payment after a Mombasa tycoon, Ashok Doshi, obtained orders blocking any payments pending the determination of his petition. FILE PHOTO | NMG
The depositors of the collapsed Imperial Bank are set to receive an estimated Sh2 billion which represents the first payment of insured deposits by the Kenya Deposit Insurance Corporation (KDIC).
On Monday, KDIC put out notices on the payment of protected deposits in Imperial Bank Limited (In Liquidation) as it undertakes the validation of the claims.
“The corporation is currently undertaking validation of claims to ascertain the actual total amount owed to depositors upon lodging their claims of protected deposits. Imperial Bank Limited depositors will be the third beneficiaries of the enhanced coverage limit of Sh500,000 [per customer],” KDIC told the Business Daily.
Protracted litigation had adversely affected the process with the first insured deposit payments coming in more than a year since the bank was placed in liquidation by the Central Bank of Kenya in December 2021.
The Central Bank ordered the liquidation of the institution on the recommendation of a KDIC-backed external audit report that established the lender had a weak financial position, which made liquidation to be the only feasible option.
Imperial depositors had received deposit payments totalling Sh3.2 billion from KCB’s acquisition of certain assets and liabilities of the institution in 2020 following a transparent expression of interest process.
Depositors in the then Imperial Bank Limited in Receivership were to be paid a total of Sh3.2 billion over four years from 2015, which would have given full access of funds to 92 percent of depositors representing 45,700 out of 50,000 depositors.
The commencement of payments to Imperial Bank depositors comes as the KDIC works to pay insured deposits in Chase Bank ahead of the expiry of a two-year window to pay the claims which lapses at the end of this month.
Last month, the KDIC disclosed that it had paid out Sh730 million to the depositors of Chase, representing 70 percent of Sh1.043 billion in protected deposits-of up to Sh500,000 per account at the lender.
As of June 30, 2021, the KDIC was working to process the payment of protected deposits in 18 banks under liquidation with the total protected deposits estimated at Sh2.75 billion against Sh44.5 billion in total deposits as at liquidation.
