Imperial Bank depositors seek access to funds in meeting with CBK governor

It was a scene of despair and agony as depositors of Imperial Bank gained an audience with Central Bank of Kenya (CBK) governor Dr Patrick Njoroge.

The depositors, most of whom are considered large depositors with tens of millions of shillings in the bank, have gone close to two years without accessing their funds after the bank was put under receivership.

At the time the CBK placed the beleaguered bank under receivership, depositors had been promised a minimum pay off of 40 percent of their deposits.

But in the three disbursements made so far, depositors have only accessed 10 percent of the deposits, with many now calling on the banking regulator to release more funds even as it looks for a new investor.

“I would like to plead with the governor to pay us some money. There are some depositors who are really suffering. They have no money for medical bills, they have no money for school fees and this is ridiculous. You can’t hold our money like this,” said one depositor who only identified himself as a member of the Imperial Bank Lobby Group.

The concern came even as the Dr Njoroge revealed that some Sh65 billion shillings was being held in the bank as deposits.

The meeting was attended by some three hundred depositors out of the 5,000 depositors who are yet to claim funds in the bank.

While acknowledging the Imperial Bank depositors plight, the central bank governor said the bank’s case remained delicate, with the regulator keen on safeguarding genuine deposit claims.

“A lot of you are suffering. All of you have pain points and they are many. I don’t want to say that’s the only concern but the IBL case is quite complicated,” Dr Njoroge stressed.

The management of the bank was taken over by the regulator in October 2015 under what was termed as unsound banking practices shortly after its long serving managing director Abdulmalek Janmohammed collapsed and died at a city’s exclusive only members club.

Since then, the regulator and the Kenya Deposit Insurance Corporation and shareholders of the bank have had a long drawn legal battle in an attempt to salvage the institution

More recently, the CBK issued a notice for an expression of interest from investors willing to take over the bank in a transaction expected to take close to a year.

“No bank has expressed any interest and this is why we are starting g this process. You fully understand liquidation has the worst outcome for you and you want to support a better outcome and you’d welcome us to go in the direction we have laid out,” said the governor.

The Wednesday meeting sought to reassure the weary Imperial Bank depositors that all was not lost, but some took issue with the time take to resolve the receivership.

“Today I have come out of the meeting with CBK quite positive. What I am wondering is why it took two years to look for a strategic investor for this bank,” said another depositor who requested anonymity.

Current Imperial Bank shareholders will also be at liberty to bid for the bank once its put up for sale.