OUR FINANCIAL TURNABOUT – IT WILL BE NOTHING SHORT OF A MIRACLE IF IT HAPPENS

Nearly two months ago, 49,000 people went to sleep with money in a bank they trusted.

The next day, we woke to the news that we had lost it all.  Businesses, family money, workers accounts, term deposits, everything…. gone.  To me it is a moot point whether you had 100 shillings or 20 million in the bank, if it is all you have, it really is relative.  It still boggles my mind, and a lot of other peoples, that this could happen in this day and age, no matter what country you are in.  I think being in an African country does not cut the mustard on this incident, not this time.  It can’t. 

I hate to think that I am becoming a doubting Tom, but I have lived in Kenya long enough now to know until the deal is done, things can change in an instant and you can be left disappointed with an outcome that looked different 7 days ago or a month ago.  We had heard no word from the Central Bank of Kenya (CBK) at all in the last 5 weeks, since it was announced that the depositors would be getting access to our money by the end of November.  Well we received some promising news last week that suggested 89% of Imperial customers would have our money in a few weeks time with the Central Bank of Kenya handing Imperial Bank depositors an early Christmas present.  It was going to allow us to access Sh8 billion that has been stuck in the bank since October 13 when it was placed under receivership.  About 44,300 customers who make up the 89% of the depositors will get access to their full amount to the maximum of Sh1 million while 5,600 depositors will receive their Sh1 million at this time and the rest of their money will be staggered and available probably by March next year once due diligence has been done.  The Central Bank of Kenya Governor Patrick Njoroge said the fund will be accessed in a matter of days through the Kenya Commercial Bank (KCB) and Diamond Trust Bank (DTB) where they have put together a solution to allow access to deposits.  Njoroge said customers were free to hold their cash with the two banks or withdraw it all and keep it under their mattresses, an idea worth thinking about for a micro-second.

There was a bit of a blame game happening between the CBK and the shareholders over the last four weeks, causing the delay, and I really didn’t expect anything to happen for the rest of this year.  It emerged that talks between Imperial Bank shareholders and the CBK stalled with each blaming the other.  Dr Njoroge said the shareholders had not been forthcoming in giving credible assurance of injecting capital into the failed bank.  Shareholders, in an advertisement last week (as they are prohibited to contact members) blamed CBK for stalling the process stating that the regulator had not appointed an auditor to carry out due diligence of its health or appointed a team of re-structuring experts to develop and implement the plan for reopening.  CBK’s decision for the payout has been met with resistance from the owners of Imperial Bank (really), who claim to have agreed to an initial rescue plan that involved injection of Sh10 billion as capital. According to the shareholders, CBK had declined their proposal, which they felt was sufficient. Bigger customers had also been invited to convert their deposits to equity in the revival plan that had the end of November as the tentative date for reopening.  CBK Governor Patrick Njoroge said he had lost patience with shareholders and directors of Imperial after they took too long to top up capital in the lender — the decisive step in the reopening.  It’s why I was so surprised that a positive announcement was made this week. 

KCB and Diamond Trust Bank have now been appointed to handle customer withdrawals for up to Sh1 million per customer, providing much-needed relief to thousands of depositors who should get their cash by Christmas. “This was a bank worth saving, and we have been working with the shareholders on this, but they have failed to bring the money,” said Dr Njoroge.  He said he was at pains to understand why shareholders were hesitant to invest cash they have in their accounts within Imperial. “I would expect that they would convert their deposits to capital immediately the bank was closed and we gave our proposal,” Njoroge said.  It also emerged yesterday that the Aga Khan Foundation for Economic Development had made a bid to save the bank through a capital injection, possibly in exchange for a stake, but found the financial hole too big and backed off. Some 5,700 depositors with more than Sh1 million in their accounts have also been guaranteed the minimum pay, with the rest to be paid out in phases, and possibly after the bank’s liquidation. According to an earlier brief issued by Njoroge, the shareholders of Imperial Bank were required to inject an estimated Sh10 billion to shore up the bank’s capitalization, which had been eroded by massive fraud carried out by management. They couldn’t put public money into this because the CBK, knows the responsibility falls entirely on the shareholders.  Defending the decision to close the bank after its owners supposedly became hesitant to inject new funds thus allowing depositors to access their funds through other banks could effectively mean the end of Imperial Bank, since it will have lost most of its customers and their deposits.  As it stands Imperial Bank may soon join 25 other Banks that have closed their doors since independence.  No Kenyan bank has come out of statutory Management which has seen KDCI liquidate 24 Banks.  Dubai Bank limited became the 25th institution to be placed under liquidation by the Central Bank of Kenya (CBK) through the Deposit Protection Fund Board (DPFB).  The lengthy process stretching decades has seen DPFB successfully wind up only 8 out of the 24 institutions which have been placed under liquidation before this year.

We were told that we would be able to file our claims from any KCB and DTB branches countrywide once CBK released relevant correspondence.  The verification process would only take three days before we could get our money.  So, it was in the media, that as of Monday 07 December, people would be able to enter a KCB or DTB bank and fill in the required forms to start the process of accessing their money.  What had been a lost mission 4 days ago, turned to real prospects of getting my money back again.  For me, it wasn’t just the loss of the last of my money, but it was my mum’s money.  It was way more than a monetary value, ever.  As it works out I received a phone call from a friend on Saturday morning telling me that DTB were already accepting the claim forms and if I could, it would be best to get in early, rather than wait till Monday, where I would expect that the branches would be overrun with Imperial clients wanting to fill in the claim forms.  So I was lucky that I was given a heads up and we made a beeline straight to the DTB Bank at Village Market.  Part of the claim process is that you are required to open a bank account with either DTB or KCB, and I guess this is where, KCB or DTB, hope to retain peoples business and it will work for me.  I have learned, I will now not place all my eggs in one basket and I will split my money between Barclays and DTB.  A hard learned lesson, let me tell you.

 
So the process was easy enough. 

A single A4 form was required to be filled in, in triplicate. 

The CBK gets a copy, the DTB keeps a copy and the KIDC got a copy. 

You needed 3 passport photos for the claim form and one for the DTB account, the rest was pretty straight forward.  I was lucky that I had a print out of my two term deposits from Imperial Bank two weeks before they had closed, with copies of that email, my claim form was complete and hopefully that would help speed up my claim. 

My DTB accounts were opened that afternoon and I was sent via email and text my new account numbers, so I felt that finally there was some positivity and light at the end of the tunnel.

It’s now another week.  Five working days actually and we have not heard a thing from DTB.

Have our forms been sent?

Have our claims been approved?

The three day turn-around has come and gone……

It is now just a waiting game.  We must give some credit to the DTB and KCB staff, who are taking on unhappy clients, clients who have not been able to access their money for nearly 2 months and probably more than a few people thinking that all banks are dubious/dodgy and untrusting.  The good thing is I have only heard of good reports of the DTB staff in the claim process, which is great considering the pressure that everyone is under, staff and clients alike.  Even though correspondence and clarity has been slack, CBK and KDIC have never been in this situation before, so they are still trying to put systems in place, making sure the right people get their money and in a timely fashion now that they have worked out their game plan.  Everyone is walking new territory and our patience needs to go a little further.  I mean, we have waited nearly 2 months now, what is an extra week or so.  I would prefer to wait my turn, than it not happen and we lose it all.  It’s all about perspective.  I also take this time to think of the hundreds of Imperial Bank staff.  With the way forward currently, Imperial Bank will not re-open and all the staff will lose their jobs just before Christmas.  Pretty crappy huh!  They have been receiving their wages since the doors closed and they are currently in their respective branches, doing the due diligence on the claim forms that we have lodges and that are now starting to pile in.  Quite ironic, they are processing forms that will see the end of their jobs in a few weeks.   Poor buggers.

Then today, 11 December, via Twitter, the Central Bank of Kenya issued a press release on the guidance and process on how to lodge claims and the KDIC now wished to inform depositors of the bank that payments through KCB and DTB have commenced with effect from today.  Payment to a number of validated claim forms have been initiated this morning and dispatched to KCB and DTB who will contact the particular depositors to visit their respective branches in order to receive payments. More payments will from today onwards be released on daily basis and in batches, to KCB and DTB as the validation process is completed for each claim. Each time this happens, KCB and DTB will contact the involved depositors to collect payment.  A massive job all round with 44,000 clients in over 30 branches country wide to process and call!  In saying that, being the first people to lodge our forms, you would think that we possibly would have been the first people to receive money today…..  It just makes me a little nervous and hopefully next week, there will be a nice sum of money deposited into my account, just in time for Christmas.