Depositors were left in tears as Chase Bank closed its down following massive insider lending. Many said they had deposited as much as Shs3million in the bank and were now unable to transact business, pay school fees or maintain themselves.
“I don’t know what to do next. I don’t know whether to throw myself and drown in a river!” a man who said he had saved all his many in the bank said.
An importer from Kisumu said he had deposited Sh3.4 million in the bank, which he had planned to use to clear car imports landing at the Port of Mombasa in a week.
Chase Bank directors were said to have lent themselves, friends, relatives and other staff over Shs 16.6 billion.
Central Bank of Kenya placed Chase Bank under receivership following liquidity problems even as the Chaiman Zafrullah Khan and Managing Director Duncan Kabui were forced to resign after giving conflicts accounts of the financial state of the bank within a week.
The first set had understated insider loans to staff and directors by about Sh8 billion, necessitating the second set of statements.
Other banks with problems include the National Bank of Kenya where the CEO Munir Ahmed, and five other top managers have been suspended over audit queries.
Imperial Bank and Dubai Bank were closed in quick succession, in what was described as “toxic lending practices”.
National Bank of Kenya, reported a Sh1.2 billion net loss, after announcing a Sh3.2 billion profit only three months earlier.
The CBK has said it will blacklist audit firms suspected of colluding with lenders to “cook books” and conceal financial challenges.