Depositors who have money in the collapsed Dubai Bank will only be paid a maximum of Sh100,000 as the reality of the bank’s situation starts to sink in.
Kenya Deposit Insurance Corporation’s (KDIC) acting Chief Executive Officer Aggrey Bett – the corporation was appointed receivers of the bank – said yesterday that all insured deposits would be paid up to a maximum of Sh100,000 per depositor.
“Any balances above this amount shall equitably be paid as and when the liquidator accumulates enough funds from sale of assets of the collapsed bank and recoveries from outstanding loans and debts,” he said in a statement.
The corporation, formerly the Deposit Protection Fund Board, was appointed by Central Bank of Kenya (CBK) as a receiver for a maximum period of 12 months.
The bank was placed under receivership due to liquidity and capital deficiencies, which exposed depositors, creditors and the banking sector to financial risk.
Upon appointment as a receiver, KDIC assumed control of the assets, liabilities, business and affairs of Dubai Bank. Mr Bett said KDIC had already appointed a receiver manager to carry out the business and manage the assets and liabilities of Dubai Bank.
“All powers of Dubai Bank and of its directors under the constituent documents exercisable by the bank or its directors under any law are now vested on KDIC and the receiver manager,” the corporation said.
KDIC says it has declared a moratorium on business that shall apply equally and without discrimination to all stakeholders of Dubai Bank during the receivership period.
“Accordingly, normal operations of the bank are suspended except for collection of loan re-payments or any other payments into the bank. Debtors are therefore encouraged to continue servicing their obligations,” the statement adds. The corporation will in the next two weeks keep all the four branches of the bank open for such transactions.