Kenya Deposit Insurance Corporation (KDIC) on Tuesday appeared headed on another collision path with Imperial Bank shareholders after it released a statement saying it would continue with the process transferring the troubled bank’s assets and liabilities to NIC Bank, KCB and Diamond Trust Bank.
The transfer of the assets to other banks was one of the grounds of a judicial review suit the shareholders filed in February.
In his ruling on the suit on Friday last week, High Court judge George Odunga issued orders prohibiting KDIC, Central Bank of Kenya (CBK) and their agents from exclusion and transfer of the troubled bank’s assets outside the dictates of the law.
KDIC and CBK was also prohibited from taking steps would lead to the liquidation of the bank.
Odunga also ruled that KDIC must engage with the shareholders to find to resolution to the bank’s problems in way that ensures that the interests of the bank shareholders, depositors, and bond holders are taken care of.
KDIC must also provide the shareholders and other stakeholders with information on how it is managing the receivership.
But on Tuesday, KDIC said it will now proceed with the process of paying Imperial Bank depositors on the strength of last Friday’s ruling on the suit.
In a statement, KDIC has interpreted the ruling as having lifted the suspension of the orders that the court had issued when the case started on the processes of paying the depositors that it had initiated.
“In the judgment delivered on November 4, 2016, the Court lifted the suspension, which has paved the way for KDIC and CBK to continue with the process they had announced and initiated,” said KDIC in the statement sent to newsrooms yesterday.
Among the payment process that the bank says was cleared by the court is disbursement of funds to Imperial Bank depositors through NIC Bank which was appointed as assets and liabilities consultant in June.
“The KDIC and NIC agreement, mandates NIC to disburse on behalf of KDIC a maximum of an additional Ksh.1.5 million each to the remaining depositors, subject to account and identity verifications,” said the corporation.
KDIC said in the statement that through this process depositors will be granted structured access to about 40 percent of the remaining amount of verified deposits above Sh2.5 million, which would bring the cumulative payout ratio for all verified deposits to about 59 percent.