News

cbkThe Central Bank of Kenya has placed Dubai Bank under receivership after the lender failed to repay money borrowed from other financial institutions to keep it afloat.
Announcing the move, Central Bank said the action was taken in the interest of the depositors, creditors and members of the public. Kenya Deposit Insurance Corporation (KDIC) was appointed as the receiving manager for a year.


The bank, whose principal shareholder is Mr. Hassan Zubeidi, who doubled up as the bank chairman, has been unable to repay the Bank of Africa Sh48.18 million.
CBK said Dubai Bank had violated banking regulations by keeping inadequate capital and was facing imminent collapse.
The regulator said the lender had been experiencing serious liquidity and capital deficiencies which have raised concerns that it may collapse any time. The bank had been issued with a banking license in April 2000.
CBK further pointed out that it has been in contact with the small lender in a bid to correct the mess but there has been no compliance as its cash reserve ratios (CRR) have continued to deteriorate.
The bank began breaching the daily CRR-5.25 percent of its deposits that it must keep with the CBK-from July 14, 2015, tightening the regulator’s scrutiny on the lender. The appointment of a receiver is meant to prevent the bank from collapsing with funds of its depositors and creditors.
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