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Central Bank of Kenya goes after individuals linked to the collapse of cash strapped bank over USD184M deficit

The payout plan comes weeks after Mauritian lender SBM Holdings received the green light from CBK to take over troubled bank.

CBK plans to seize and sell off assets of these  individuals to cover a Sh19 billion deficit owed to customers as deposits.

CBK governor Patrick Njoroge and the Kenya Deposit Insurance Corporation (KDIC) chief executive officer, Mahmoud Mohamed, in a joint briefing on Friday announced that Chase Bank customers will access 75 per cent of the Sh76 billion deposits locked in the troubled lender in staggered phases over a period of three years.

“We will have to get as much from the shareholders or those that borrowed or those that took money out of the bank,” said Dr Njoroge.

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The process for releasing the funds to about 3,100 affected depositors will kick off “in a matter of weeks”, the two said without giving a more specific timeline

The payout plan comes weeks after Mauritian lender SBM Holdings received the green light from CBK to take over troubled bank.

In the transaction, Dr Njoroge said, 25 per cent or about Sh19 billion will remain with Chase Bank as part of other “assets and liabilities”.

“We will need to get the assets, we freeze them, get them back and sell them and provide that as new liquidity or as new assets that can be distributed for the depositors… The point is we have not given up. With the objective of raising as much of the value and giving it back to the rightful owners who are the depositors we will use all these elements.”

This means that customers will not have access to all their funds as the CBK seeks to have bank’s managers and owners who are implicated in the bank’s woes prosecuted and their assets attached.

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The regulator is already in court pursuing the assets of the disgraced directors’ who include Chase Bank founder and former chairman Zafrullah Khan and eight other former senior managers and directors at Chase Bank.

In the ongoing case before the courts, the CBK hopes to recover Sh14.9 billion the regulator says was lost through irregular insider loans and property acquisitions.

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