Kenya’s Chase Bank placed under receivership by CBK
A retail bank in Kenya has been placed under receivership after running into financial difficulties.
Panic withdrawals on Wednesday, caused by “inaccurate” rumours on social media, led to a run on Chase Bank, said the Central Bank of Kenya (CBK).
Its branches were shut on Thursday. The bank is the third to be placed under the CBK’s control in the past year.
Chase had recently released two conflicting financial statements, a BBC reporter says.
A subsequent audit showed it had hidden loans to its directors, adds the BBC’s Ferdinand Omondi in the capital, Nairobi.
In a statement, the CBK said it would appoint a team to run the bank.
The team would be given 12 months to come up with an “appropriate resolution strategy”, said a CBK statement.
One depositor told the BBC that he had $100,000 (£70,000) at Chase, and he had no idea whether he would get the money back.
Hundreds of customers flocked to Chase branches and ATM machines countrywide to withdraw their cash on Thursday, only to find them closed, our reporter says.
All 62 of its branches would remain closed until new management was put in place, said CBK chief Patrick Ngugi Njoroge.
He insisted that the banking sector in Kenya, East Africa’s biggest economy, was stable, despite the banks going into receivership.
Chase is a mid-sized bank with a mixture of low- and middle-income customers, as well as wealthy businessmen who trade with firms in the Middle East.
It also has a unit which specialises in Islamic finance.
“The bank is the third to be placed under the CBK’s control in the past year.”
watch it closely..