The Kenya Deposit Insurance Corporation (KDIC) has announced the commencement of payment of protected deposits to depositors of Imperial Bank, eight years after the lender collapsed.
The Central Bank of Kenya (CBK) had approved the bank’s liquidation in 2021, after Kenya Commercial Bank (KCB) struck a Ksh3.2 billion deal to acquire Imperial Bank’s assets and liabilities. Most of the cash was used to pay depositors. As of 2021, around 4,300 depositors, or eight percent of Imperial Bank depositors, were yet to get their money back in full. 45,700 depositors, or 92%, had been paid in full.
The commencement of the KDIC process will enable the remaining depositors to submit proof of debt for validation and payment. The payment is valid for a two-year period from the date of the notice – April 3, 2023.
KDIC advised: “To receive the payments, depositors of Imperial Bank Limited (in liquidation) are advised to download the claim forms from the KDIC website: www(dot)kcid(dot)go(dot)ke, fill and return duly completed forms with attachments to:
- Imperial Bank Limited (in liquidation) branches at IPS building, Nairobi and Kaunda Street, Mombasa
- Central Bank of Kenya branches in Eldoret, Mombasa and Nakuru”
KDIC had been appointed by the Central Bank to liquidate Imperial Bank and facilitate payments for the remaining depositors, creditors and bondholders.
Imperial Bank collapsed under the weight of massive fraud, with CBK stating that high-level managers and administrators had made illegal transactions which cost the bank Ksh34 billion. Imperial Bank Limited went into receivership on October 13, 2015.
In a forensic audit report ordered by the CBK, the regulator highlighted fraudulent loans issued by Imperial Bank and the misrepresentation of its financial statements.
“These activities relate largely to irregular granting of loans by IBL’s management, contrary to the legal and regulatory requirements, and the internal policies of IBL. In particular,
these irregular loans were a violation of the statutory limit of lending to a single
borrower, and inadequate loan loss provisions, thereby overstating IBL’s capital
adequacy position,” the apex bank noted.