Kenya Central Bank Worried as Imperial Bank Share Holders Delay Proposal which might Revive the Lender

Kenya Central Bank Worried as Imperial Bank Share Holders Delay Proposal which might Revive the LenderOn Friday, the central bank of Kenya said it was worried that the Imperial Bank's shareholders were not taking quick actions to suggest proposals that will revitalize the medium sized lender. Last month, the privately owned bank was ordered by the Central Bank of Kenya
(CBK) to be put in receivership after the board of the Imperial Bank was alerted of malpractices.

The government regulatory agency appointed Kenya Deposit Insurance Corp (KDIC) to run Imperial Bank for about one year. According to the central bank, the Imperial Bank can still be revived and its shareholders are considering a proposal through which additional capital can be injected for its reopening.

In a statement on Friday, the CBK said "The proposal includes an injection of new capital by shareholders, the conversion of a percentage of large deposits to equity, and recovery and collateralization of fraudulent loans."

Imperial Bank was not the only one to be put in receivership in August as Dubai Bank Kenya Ltd also met with the same action after facing liquidity problems.

In the current week, the central bank said it was considering of implementing more severe penalties for commercial banks which break rules.