Kenya faces money crisis, analysts say it's temporary
Oct 26, 2015 Kenya’s central bank recently put the Imperial Bank Ltd under management for 12 months due to inappropriate banking practices. Over a period of three months, two mid-tier commercial banks have been placed under receivership by the country’s Central Bank.
This has left several customers in anxiety over the fate of their deposits, should the banks go into liquidation. Aside from loan re-payments, all other operations in the bank have been suspended, leaving customers with no access to their deposits.
One of the customers said:
“I am a depositor with this bank, Imperial bank and I heard that the bank has been put under receivership. I was very much worried because I knew I had some projects here and there that I was supposed to effect and I had some workers that I needed to pay so it was very devastating news to me,”
According to reports, the apex bank appointed the Kenya Deposit Insurance Corporation as temporary managers over the Imperial Bank.
Despite the current cash flow crisis, analysts have moved to assert that the prevailing situation isn’t a reflection of the state of the economy.
Habil Okaka, CEO of Kenya Bankers’ Association said:
“It is a temporary thing which should not be viewed as a picture of the economic performance of the country. Similarly for the banking sector, what happened to Imperial bank and Dubai bank previously 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,”