KDIC—the agency which manages deposit insurance schemes for banks — said it has concluded the recovery and sale of assets in the three collapsed lenders, paving the way for payments of about Sh250 million.
The three are part of the 19 failed banks which are at various stages of liquidation with some having collapsed as far back as early as 1990s.
Depositors and creditors in collapsed Dubai Bank, Euro Bank and Kenya Finance Bank will start getting payments as the State moves closer in winding up the lenders, the Kenya Deposit Insurance Corporation (KDIC) announced Tuesday.
KDIC—the agency which manages deposit insurance schemes for banks — said it has concluded the recovery and sale of assets in the three collapsed lenders, paving the way for payments of about Sh250 million.
Chief executive Mohamud Ahmed Mohamud said the latest payment round will cover 92 percent of claims in Dubai Bank, 93 percent in Kenya Finance Bank, and 97 percent in Euro Bank.
The three are part of the 19 failed banks which are at various stages of liquidation with some having collapsed as far back as early as 1990s.
“The minimum payment is Sh50,000 per depositor, but it will depend on your deposit level and that means others will get higher amounts,” Mr Mohamud told a press conference in Nairobi.
“So [we are doing] a flat payment plus a percentage [of the deposits] because the principle of deposit insurance is to fully pay the small depositors. So if the Sh50,000 can pay the small depositors, that’s a plus for us because big depositors are expected to be more financially literate and can weigh risks.”
He did not disclose the maximum percentage of the deposits long-suffering clients will get, saying details will be published in newspapers from today.
KDIC, Mr Mohamud said, has recovered about Sh1.5 billion from collapsed banks through debt collectors, adding that the failed banks have “extremely poor” assets with most of the loans not secured and documented.
“The banks that we are liquidating are the banks of yesteryears when there were poor prudential and regulatory frameworks and the assets are extremely poor,” the KDIC chief said.
Dubai bank was initially placed under statutory management in August 2015 after running out of cash to meet the daily threshold needed to meet clients’ requests before the Central Bank of Kenya approved its liquidation.
On the other hand, Euro Bank went down in February 2003 with an estimated Sh1.4 billion deposits from state firms, including National Social Security Fund, National Hospital Insurance Fund and Kenyatta National Hospital.
