Central bank puts Chase Bank Ltd under receivership

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April 7, 2016 5:25 PM

Chase Bank Kenya, a privately owned mid-sized lender, said on Wednesday its chairman, Zafrullah Khan, and group managing director, Duncan Kabui had left the bank, but gave no reasons for their departure.

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

Kenya's central bank on Thursday placed Chase Bank Ltd. under receivership for 12 months to protect depositors, creditors and the public.

Chase Bank Ltd. experienced liquidity difficulties following "inaccurate social media reports" and the departure of two directors and was not able to "meet its financial obligations on April 6", the Central Bank of Kenya (CBK) said in a statement on its website.

"In light of the above, CBK has appointed the Kenya Deposit Insurance Corporation to assume the management, control and conduct of the affairs and business of the institution and to exercise all the powers of the institution to the exclusion of its Board of Directors," the central bank said.

Chase Bank Kenya, a privately owned mid-sized lender, said on Wednesday its chairman, Zafrullah Khan, and group managing director, Duncan Kabui had left the bank, but gave no reasons for their departure.

Chase Bank Kenya could not be reached for comment by Reuters.

The receivership of Chase is the third by the central bank since the second half of last year.

Dubai Bank, a smaller lender, was taken over by the central bank followed by another mid-sized lender Imperial Bank.

The collapse of Imperial caused jitters in the market as investors fretted about the health of the country's financial sector in East Africa's top economy.

On Wednesday, central bank governor Patrick Njoroge said there were no "systemic problems" in the sector.

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