Large depositors who have their money locked in Chase Bank will get to access it in August as receiver manager KCB Bank, the Central Bank of Kenya and Kenya Deposit Insurance Corporation begin a due diligence process that will unlock some of the deposits.

Paul Russo, the receiver manager appointed by KCB, said that depositors who had more than $10,000 before the bank was closed in April will get their money after an independent agency reviews Chase Bank’s business and presents its report to the Central Bank in four weeks.

Mr Russo said the three institutions will determine which of the depositors can access their money and those who can use the money to offset their loans.

He said that it would not be prudent to let everyone who has requested to withdraw $10,000 have it, as the funds would be depleted.

“If every customer took their $10,000,  then there would be no bank,” said Mr Russo.

The receiver manager said that they were also in the process of unlocking the bank’s lending operations.

“However, customers have been accessing small loans like overdrafts and confirmation of guarantee. We are now working on a policy, which is in the final stages of approval at CBK, that will help us give out loans by August,” said Mr Russo.

Fully operational

“We are now keen on looking deeper into the business to determine the next step of bringing Chase Bank back to full operation. This will then help settle the question of how the balance sheet will be funded going into the future — and who will be the owner. The ownership, for which KCB will be one of the interested bidders, will be determined independently by CBK,” said KCB Group chief executive officer Joshua Oigara.

Mr Oigara said they were in talks with Chase Bank’s foreign shareholders who recently accused KCB of having a “conflicted role” as receiver manager and presumed buyer of a significant stake in the lender.

Dubai Bank, Imperial Bank and Chase Bank collapsed between July 2015 and April this year. 

Big depositors at Imperial Bank are still waiting to get access to their cash, but those with balances of $25,000 were to be fully compensated last week.

Those with more than $25,000 are awaiting the outcome of a court case that stopped the transfer or sale of Imperial Bank’s assets, which would be necessary to accumulate funds to pay them.

Dubai Bank, which went under in August last year, has had the deposit underwriter pay out a total of $470,000 to 760 depositors out of 7,743 accounts.

The deposit protection agency is currently liquidating Dubai Bank after the High Court last month threw out a petition seeking to stop the closure of the lender.