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Kenya cash crisis claims second scalp

Tuesday, October 20, 2015 - 01:27

Kenya's ongoing liquidity crisis claims another victim as Imperial Bank is brought into receivership, leaving its depositors asking whether they'll see their money again. David Pollard reports.

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It wasn't exactly a red letter day. A notice of closure meaning these customers went away with nothing more than a dose of anxiety. (SOUNDBITE) (English) JOHN, BANK CUSTOMER SAYING: "I am a depositor with this bank, Imperial bank and I heard that the bank has been put under receivership ... And I had some workers that I needed to pay so it was very devastating news to me." Imperial's the second bank to be placed in receivership by Kenya's Central Bank since August. All operations apart from loan re-payments have been suspended after Imperial announced "inappropriate banking practices". Dubai Bank Kenya is the other to have suffered a similar fate. Kenya's shilling has lost 14 per cent of its value against the dollar this year. Interest rates have climbed 300 basis points. A currency under pressure - and a liquidity crisis that's also putting finance minister Heny Rotich in the spotlight over debts and delays in payments to civil servants. Habil Olaka of Kenya's Bankers Association. (SOUNDBITE) (English) HABIL OLAKA, KENYA BANKERS ASSOCIATION C.E.O SAYING: "What happened ... should not be seen as something that is prevalent for the whole banking sector and is not a reflection of the whole industry. It is not a systemic problem." Finance minister Rotich said the government wants to catch up on its revenue shortfalls. Though after a government downgrade on its growth forecast to 6 percent from 6.5, that may take even longer than hoped.

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Kenya cash crisis claims second scalp

Tuesday, October 20, 2015 - 01:27