Central bank to help banks that face liquidity pressure

folarin okunola

April 11, 2016 5:10 PM

Njoroge said the facility, for which he did not give the amount but said had no upper limit, would be available for as long as necessary to provide a sense of calm and reiterated that the financial sector was stable.

Kenya Central Bank Governor Patrick Njoroge speaks during an interview with Reuters in his office in the capital Nairobi, December 8, 2015. REUTERS/Thomas Mukoya

Kenya's central bank will provide a facility to any bank or microfinance institution that faces liquidity problems through no fault of its own, starting on Monday, Governor Patrick Njoroge said on Sunday.

"From Monday, we will avail a facility to any bank or microfinance institution that comes under liquidity for no fault of its own. We will avail this facility for as long as is necessary," Njoroge told a news conference.

Last week, the central bank put Chase Bank Kenya into receivership after its gross non-performing loans rose sharply last year.

The mid-sized bank was the third lender to be taken over by the central bank in nine months, fuelling worries over the health of the sector.

On Saturday, President Uhuru Kenyatta said he supported central bank Njoroge's actions to protect depositors' money.

"We are really dealing with any fear, anxiety that is out there," Njoroge said.

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