Chase Bank
has been placed under receivership for 12 months after experiencing "liquidity difficulties", Central Bank has said.
CBK announced the institution's placement under the Kenya Deposit Insurance Corporation in a statement on Thursday.
Governor Patrick Njoroge said the bank was unable to meet its financial obligations.
"The bank experienced liquidity difficulties following inaccurate social media reports and the stepping aside of two of its directors," Njoroge said.
Chase Bank group MD
Duncan Kabui and chairman Zafrullah Khan resigned on Wednesday amid growing public concerns over the
.
Paul Njaga, who has been chief executive and deputy group MD, said their exit was linked to the bank's financial performance in 2015. The bank has sank into a Sh742.80 million net loss from a profit of Sh2.31 billion in 2014.
Njoroge explained: "CBK appoints a receiver if, among others, an unsafe or unsound condition to transact, a bank has substantially insufficient capital or if there is a violation of any law or regulation."
He said the Insurance corporation was appointed receiver
in the interest of depositors, creditors and members of the public.
Njoroge said KDIC
will assume management control and conduct of the affairs and business of the institution licensed in 1996.
"It will exercise
all the powers of the institution to the exclusion of its board of directors and advise the CBK of an appropriate resolution strategy as soon as it is practicable
and not later than 12 months from date of appointment," he said.
Central Bank
in October 2015
and handed its management over to the KDIC over "unsafe or unsound business conditions".
Dubai Bank is under on August 14.
CBK said at the time that the bank was experiencing serious liquidity and capital deficiencies, raising concerns that it was unlikely to meet its financial obligation.