SIGNING OF THE AGREEMENT BETWEEN SBM BANK (KENYA) LIMITED AND KDIC

SIGNING OF THE AGREEMENT BETWEEN SBM BANK (KENYA) LIMITED AND KDIC
Press Releases  |  
Tue, 17 Apr 2018

Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) announce the signing of an agreement between SBM Bank (Kenya) Limited (SBM Kenya), and KDIC for the acquisition by SBM Kenya of certain assets and assumption of certain deposits with respect to Chase Bank (Kenya) Limited (In Receivership) (CBLR). This concludes the discussions between SBM, KDIC and CBK on the CBLR transaction that was announced on January 5, 2018.

The agreement provides that there will be a transfer of 75 percent of the value of deposits currently under moratorium at CBLR, and the transfer of the majority of staff and branches of the existing CBLR operations. 25 percent of the value of moratorium deposits will remain in CBLR.

For the 75 percent of moratorium deposits to be transferred to SBM, the terms of these transferred deposits are to be as follows:
a) 25 percent of each transferred deposit is to be held in a current account with SBM Kenya, with unrestricted usage and without interest being payable thereon; and
b) A further 25 percent of each transferred deposit will be held in a savings account with SBM Kenya at an interest rate of 6.65 percent per annum, with unrestricted usage; and
c) The remainder of each transferred deposit will be held on fixed term deposit with SBM Kenya at an interest rate of 6.65 percent per annum , such deposits (together with the interest thereon) to mature, as to one-third of such remainder, on the first, second and third anniversaries of the transfer respectively.

The customary conditions that apply to current and savings accounts, and term deposits, respectively, will apply to these deposits. The interest rates in (b) and (c) above will be aligned to the interest rates as prescribed by law.

Non-moratorium depositors will also be transferred and will continue to have full unrestricted access to their funds.
The date these deposits will be available, and the details under which the customer accounts will be managed, will be announced shortly.
Through this acquisition, and combined with its other operations in Kenya, SBM will bring its experience and expertise from Mauritius and other markets, to further enhance the competitiveness and resilience of Kenya’s banking sector.

Read the press release here