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Roundup: Kenya's troubled Chase Bank resumes operations

Xinhua, April 27, 2016 Adjust font size:

Kenya's Chase Bank, a middle-level financial institution resumed operations on Wednesday in a timely move that restores confidence in the banking sector.

The Kenya Commercial Bank (KCB) Group took over the operations of Chase Bank (In Receivership), which collapsed a month ago sending ripples in the East African nation's banking sector.

Officials said the resumption of operations at Chase Bank (IR) gives depositors a renewed sense of hope after the Central Bank of Kenya (CBK) placed the bank under statutory management.

Speaking in Nairobi during the opening ceremony, KCB Group Managing Director Joshua Oigara said the Kenyan banking system has the capacity to offer globally bench-marked but locally relevant solutions to market challenges.

"CBK and KCB Bank Kenya will ensure that Chase Bank (IR) will have adequate liquidity for its operations. Chase Bank (IR) built a strong brand based on strong customer relationships and a commitment to service excellence. We are determined to regain our clients' trust," he said.

Chase Bank's closure caused panic in the local financial markets when the CBK sent executives from the Kenya Deposit Insurance Corporation accompanied by the Police to take over the Bank.

A mid-tier lender with 57 branches across Kenya, mostly serving corporate, retail and small and medium enterprises, Chase Bank suddenly failed to meet its depositors' demands for cash, leading to its closure.

Among those who had been hit hard by the closure of Chase Bank were farmers, students and small businesses.

While assuring customers that their money was safe, Paul Russo the Receiver Manager appointed by KCB said that Chase Bank (IR) remained committed to its customers and was keen on retaining its clientele.

"We recognize the fact that our customers have been regrettably inconvenienced over the last two weeks. We thank them for their support and remain deeply committed to our customer service promise," Russo said.

He said Chase Bank's (IR) unparalleled support to the small and medium sectors will continue unabated.

"We are cognizant of the central role SME's play in the country's economic growth and we are keen on living up to our promise as the 'relationship bank,'" he added.

Last week, The Kenya Deposit Insurance Corporation (KDIC) appointed KCB Bank Kenya as Chase Bank's (IR) statutory manager.

The appointment gives KCB the mandate to undertake all roles and responsibilities of running the bank on behalf of KDIC, the receiver manager, as provided for under the Kenya Deposit Insurance Act 2012.

All 57 branches across the country will remain open during the Bank's normal operating hours while Chase Bank's (IR) alternative - online and mobile banking -channels will be available. Any new deposits will also be available as soon as they are needed, proof of the Bank's determination to resume normal operations.

"We would like to retain as many of our clients as possible. But as earlier announced, customers with a million shillings or less in deposits can access all or part of their money," Russo said.

"The bank's history of exceptional customer service has not changed despite the receivership. If anything, our commitment to our customers has redoubled as we look forward to growing with our customers." Endit