Kenya’s Dubai Bank has been placed under liquidation, barely ten days after it was placed under receivership.
The bank was recommended for liquidation by its receiver managers Kenya Deposit Insurance Corporation (KDIC), setting the stage for its dissolution.
A fortnight ago, Kenya’s Central bank (CBK) placed Dubai Bank under receivership after breaching the cash reserve ratio for the last one month and failing to honour its financial obligations.
“On 24th August 2015, KDIC submitted a report to CBK recommending that Dubai Bank Kenya Limited be liquidated. The recommendation was premised on the review of Dubai Bank Kenya Limited by KDIC after appointment as receiver by CBK. The KDIC report indicates that considering the magnitude of weaknesses of Dubai Bank Kenya Limited, liquidation is the only feasible option,” CBK said in a statement.
Two weeks ago, CBK placed Dubai Bank in receivership adding that it had been in contact with the lender to attempt to redress the situation but there has been no compliance by the bank and its cash reserve ratios have continued to deteriorate. Dubai bank was also accused of failing in its financial obligations including $492,704 owed to Bank of Africa Kenya Limited. The bank was also fined $55,171 by CBK.
“KDIC will release information about the liquidation of Dubai Bank Kenya Limited and payment of depositors in due course,” CBK said.
While placing it in receivership, CBK said that it has considered Dubai Bank’s violations of banking laws and regulations, including failure to maintain adequate capital and liquidity ratios as well as provisions for non-performing loans and weak corporate governance structures is detrimental to the interests of its depositors, creditors and the public. Dubai Bank has in the past three years been fighting to disprove claims that its clients risk losing billions of shillings to dodgy book and record keeping.