The Central Bank of Kenya (CBK) has put Chase Bank under statutory management for one year due to “unsafe financial conditions”.

In a press statement released today, CBK said that it had taken the drastic decision since Chase Bank had experienced “liquidity difficulties.

“The Central Bank of Kenya has today Thursday appointed Kenya Deposit Insurance Corporation (KDIC) as the receiver manager for Chase Bank Limited for a period of twelve months, pursuant to the provisions of Sections  43 (1), 43(2) and (53)1 of the Kenya Deposit Insurance Act, 2012,” said CBK in a statement.

“Chase Bank Limited experienced liquidity difficulties following inaccurate social media reports and the stepping aside of two its directors. Consequently it was not able to meet its financial obligations on April 6, 2016.”

KDIC will now assume the management, control and conduct of the affairs and business of the institution to the exclusion of its board of its directors and advise CBK of an appropriate resolution strategy as soon as it practicable and not later than twelve months.

CHASE BANK BOSSES RESIGN

Yesterday, Chase Bank chairman Mr Zafrullah Khan and group managing director Mr Duncan Kabui stepped aside following concerns over the credibility of the bank’s financial statements as details emerged that the bank restated its financial results, posting a Sh686 million loss. The bank’s financial performance has raised concern having reported a Sh2.3 billion profit in 2014.

SOCIAL MEDIA PROMPTS PANIC WITHDRAWALS AT CHASE BANK

Social media escalated the chase bank crisis and it was just next to impossible to manage it because as soon as details of the “cooked” financial results of the bank emerged online, the issue went viral and panic withdrawals ensued.

Today scores of depositors have flocked Chase Bank branches countrywide seeking to withdraw their money after the bank was placed under receivership but most branches remain closed.

Chase bank becomes the third bank to be put under receivership by CBK just months after the Imperial and Dubai bank.

The Chase bank scandal also comes barely a week after National Bank sent six senior managers on compulsory leave pending an investigation into the bank’s financial performance. In its case, the bank reversed a Sh3.2 billion third quarter profit to post a Sh1.2 billion loss after several audits poked holes into its performance.