KCB Group fails to pay Imperial Bank depositors

By M&M Reporter

Frustrations and confusion have hit Imperial Bank depositors following deepening confusion over the mode of payment as well as the timelines for receiving their payments of the deposits.

Tossed between Imperial Bank new owners and the bank’s receiver, the depositors, who have been waiting for the resolution of the bank’s receivership since 2015, have been left with social media as the only place they can post their lamentation.

Since the lapse of the two weeks within which they had been promised access to their savings, the depositors have taken to social media to vent their as a group or as individuals.

And the lamentations have increased in tempo in the last one month raising questions why it is taking too long for Imperial Bank’s new owners, KCB Group to disburse the payments to the depositors.

Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) announced on the eve of Jamhuri day last year that the depositors would receive 12.7 percent of their deposits in Imperial Bank in 14 days following acceptance of KCB Groups offer to take over the troubled bank.

“The Binding Offer accepted, includes granting access to 12.7 percent of eligible depositor balances remaining at IBLR within 14 days of this announcement, subject to account and identity verifications,” said CBK and KDIC in the press release announcing the acceptance of the KCB Group takeover bid.

The two institutions said the promised disbursements would push the recoveries to 35 percent of original eligible deposits held at the date of receivership when combined with earlier disbursements,” said the press release. 

48 days since CBK and KDIC made the commitment that depositors would receive part payments of their deposits, only less than 10 percent of the depositors have been paid, according to Imperial Bank Depositors Lobby Group (IBL Lobby).

This news site has seen disturbing exchanges between the depositors and KCB Group.

In one exchange, a depositor asked KCB Group had not deposited money to his account.

In response, KCB Group said it was conducting a verification process and the depositors would only be paid once this process was completed.

Asked when the process would be completed KCB responds by saying depositors will be informed when the time comes.

“What I can tell you is that only less than 10 percent of the depositors have received their deposits. But even those who have received have told us that the money they received was not the correct amount. Some have received as little as 10 percent of the deposits,, Imperial Bank Depositors Lobby Group Chairman Mahmoud Khambiye told this news site in a telephone conversation.

Mahmoud says the process has been thrown into confusion because the depositors do not know where to get answers to their queries between KCB and KDIC.

“When the depositors ask why they are not getting their payments, KCB is asking depositors to raise those with complaints to raise their issues with Kenya Deposit Insurance Corporation (KDIC).
As a lobby group, we have tried to raise these complaints with KDIC and Central Bank of Kenya but none of the two institutions is willing to respond to us.

He says the depositors are stuck in the dark. We do not know what is happening anymore.

“It is now past one month since CBK and KDIC promised that depositors would receive part of their deposits. But no one is telling us the fate of our savings,” he says.

What is also curious in the delay is the reason that KCB Group is giving depositors for the delay.

The banking group has mentioned loan verification process as the cause of the delay. However, it is instructive that this verification has been conducted several other banks during Imperial Bank’s receivership period including KCB Group. Other banks that conducted the verification processes are DTB and NIC Bank. Data from the earlier verification processes was then handed over to KDIC.

 

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