Family Bank has moved to allay fears over its financial stability following claims in the media that it is likely to be placed under receivership.
In a statement, the lender, through its chairman Wilfred Kiboro said it was in a strong financial position and asked customers to ignore negative statements and malicious rumours.
Kiboro said they are fully cooperating with ongoing investigations into the Sh1.6 billion National Youth Service scandal, adding that the same had not had any impact on its operations.
Reports of alleged panic withdrawals came days after Central Bank of Kenya Governor Patrick Njoroge backed the prosecution of the bank’s top officials over the scandal, saying it would not have any effect on the banking sector.
Director of Public Prosecutions Keriako Tobiko had initially sought to know the bank’s position on whether the prosecution of the officials, who are already on suspension, will jolt the industry.
“We wish to reassure our 1.7 million customers that we are open for business and you can count on us to continue serving you. Be sure that we will ensure we live up to your expectations,” Kiboro said.
“We can confirm that we are in a strong financial position and well within the statutory requirements as governed by Central Bank of Kenya, a fact that is easily confirmed through the returns we make as required by law,” he added.
He also said the Directorate of Criminal Investigations was probing on the source of the rumuors, adding they were closing in on him.
Here is a statement from Family Bank posted on its Facebook page:
At the same time, the Family Bank Foundation similarly assured the public that the bank is in a strong financial position, having disbursed more than Sh62 million  in form of scholarships for 341 students.
The banking sector has this year been jolted twice by the placing under receivership of Chase Bank Ltd and Imperial Bank Ltd following internal governance issues.
Though Family Bank has been the focus of the NYS scandal, the scope is set to widen after the Public Accounts Committee revealed that 17 other banks were under their radar for moving billions of shillings under the programme.
Family Bank was first mentioned when it emerged that one of the key characters in the scam Josephine Kabura had accounts of her 20 firms at the bank and that she used to withdraw huge amounts of money to ostensibly buy materials for construction of a road in Kibera.
