Rafiki says Chase Bank takeover to delay cheques

A Chase Bank branch in Nairobi
A Chase Bank branch in Nairobi. FILE PHOTO | NMG 

Chase-Bank subsidiary Rafiki Microfinance has notified its customers that co-branded cheques will take several weeks to clear amid acquisition of its parent company by Mauritius-based SBM Holdings.

Effective August 17, cheques could take 21 days to go through as the micro-lender phases out cheques bearing Rafiki and Chase Bank brands, thus inconveniencing customers who usually enjoyed a two-day clearing process. “Kindly note…Rafiki-Chase Bank co-branded cheques issued may take a maximum of 21 days to clear. We are in the process of issuing you with a new cheque book which will normalise the services,” said Rafiki in an email sent to customers Friday. New cheque books will be available to customers in early September that customers will not be charged for.

Central Bank of Kenya (CBK) approved the SBM-Chase Bank merger on June 13 which saw SBM’s local subsidiary, SBM Kenya, take over the troubled lender. Chase Bank was placed under receivership in April 2015.

The regulator said SBM Kenya would assume 75 per cent of the value of Chase’s deposits under moratorium, all non-moratorium deposits and would take over majority of its branches and employees.

The remaining 25 per cent value of moratorium deposits along with other assets and liabilities remains in Chase Bank.

Last year, Rafiki - 75 per cent owned by Chase Bank - said it suffered from the loss of income from significant deposits held at its parent firm.

CBK this year recommended that the core capital requirement for micro-finance banks should be increased to provide a buffer against potential financial downturns.