Chase Bank (in receivership) will start taking fixed deposits and resume lending.
The move marks a major milestone in the turnaround efforts of the bank signalling that most of the major issues under resolution have been addressed, paving the way for full resumption of banking services to all customers.
The decision on whether Chase Bank could accept term deposits has been awaiting regulatory approval from Kenya Depositors’ Insurance Corporation (KDIC).
After the Central Bank of Kenya’s (CBK) approval, customers will have more lending opportunities while the generation of income to support the full recovery of Chase Bank will gain momentum.
The Bank was placed under receivership by KDIC in April, with KCB Bank Kenya Limited appointed as the Receiver Manager. In an unprecedented turnaround, the bank reopened its doors barely a month after it was taken over, and near normal operations have since resumed.
KCB recently announced that it would soon finish its assignment, allowing the receivership process to move to the next phase of recapitalizing the bank and finding a strategic partner to acquire a majority stake.
“With the active support of our customers and the relevant stakeholders, we have done what we came here to do: we have reopened the bank, stabilised its operations, renewed confidence in the bank and now we are on the final phase before successfully handing over. I believe a good job has been done so far based on our mandate from KDIC,” said Russo.
He added that the bank has enjoyed tremendous goodwill from the customers during the difficult period following its receivership, a result of the customer friendly service that has been synonymous with Chase Bank.
“I believe the reopening of Chase Bank is a case study for the banking sector not only in Africa but across the globe; not too many banks have survived a receivership and I am extremely happy that we have managed to achieve what many thought an impossible task,” said Russo.
While lauding Chase Bank’s revival as a landmark case study for Kenya’s financial services sector, KDIC’s Acting Chief Executive Officer, Mohamud Ahmed said they would continue to work closely with CBK and the banking industry to mitigate possible failures.
“In the unlikely event of another failure, KDIC will resolve it promptly for the benefit of depositors, creditors and the general public. We are closely monitoring Chase Bank with a view to resuming full services and wish to thank the depositors for their continued support,” said Ahmed.
Since April, Chase Bank has recorded improved inflows in excess of Sh10 billion while thousands of new customers have also come on board since the Bank reopened its doors. Some of the milestones that Chase Bank hit since reopening on April 27, 2016 include: allowing small depositors to access up to Sh1 million, activating automated teller services, real-time gross settlement, limited lending for trade finance services up to Sh5 million, VISA services and the restoration of correspondent banking by Deutsche Bank, one of the largest banks in the world.