Kenya Deposit Insurance Corporation
| Agency overview | |
|---|---|
| Formed | 2012 |
| Jurisdiction | Government of Kenya |
| Headquarters | UAP Old Mutual Towers Upper Hill, Nairobi Kenya |
| Employees | 50 (2020)[1] |
| Agency executive |
|
| Parent agency | Central Bank of Kenya |
| Website | www |
Kenya Deposit Insurance Corporation is a statutory institution established under the Kenya Deposit Insurance Act, 2012 (KDI Act, 2012). The Corporation is mandated to provide a deposit insurance scheme for customers of member institutions, to provide incentives for sound risk management and generally promote the stability of the financial system and prompt resolution. [3]
History[edit]
The Corporation was an integral part of Central Bank of Kenya (CBK), the country's bank regulator, prior to its establishment and enhancement of KDIC's mandate in 2012. The law also established the Deposit Insurance Fund (the Fund), replacing the Deposit Protection Fund. KDIC, by law is mandated to administer the Fund, by collecting contributions for the Fund from member institutions; and holding, managing, and applying the Fund.
KDIC is also mandated to receive, liquidate, and wind up institutions for which it is the designated receiver or liquidator, a function previously overseen by the Central Bank of Kenya. The KDI Act, 2012, mandates the Central Bank of Kenya, to appoint KDIC as the sole and exclusive receiver of a member institution when (a) the institution's obligations to creditors exceed its assets (b) deliberately violates a regulatory or supervisory order (c) fails to provide necessary access to inspectors or lacks general transparency (d) is unable to meet any of its financial obligations, either now or in the near future (e) engages in activities that violate any of the country's laws.[3]
In 2014, the law was amended and KDIC separated from the Central Bank. KDIC collects a flat rate fee of 0.15 percent of all deposits from each member institution, adjustable at the discretion of KDIC. It also collects an additional fee based on the risk-adjusted percentage of their total deposit liabilities during the previous twelve months as calculated by KDIC.[4]
Staffing[edit]
KDIC is in the process of populating its entire staff structure that currently stands at 68 employees. The Corporation hopes to have attained a staff complement of 160 by 2025.[1]
Recent interventions[edit]
In June 2016, CBK mandated KDIC to intervene, when member financial institutions fell foul of Kenya's banking laws and regulations, during the previous twelve months.
- In August 2015, Dubai Bank Kenya, was placed under receivership by the CBK, on account of “serious cash-flow problems”. KDIC was called in to refund customer deposits.[5] KDIC has recommended liquidation of the bank.[6]
- In October 2015, Imperial Bank Kenya failed due to “unsafe and unsound business conditions to transact business” that existed in the bank. KDIC was instructed to intervene by CBK.[7] In June 2016, CBK agreed with NIC Bank to take over the 28 branches and all 470 former employees of Imperial Bank once the outstanding litigation is resolved.[8]
- In April 2016, Chase Bank Kenya failed and was placed under receivership by the Central Bank of Kenya, prompting KDIC to step in.[9] Three weeks later, KCB Bank Kenya Limited was appointed receiver-manager of Chase, with all branches re-opening on 27 April 2015, under KCB oversight.[10]
Location[edit]
KDIC's headquarters are located at Old Mutual Tower, Upper Hill, Nairobi.[1]
See also[edit]
References[edit]
- ^ a b c Patrick Alushula (7 February 2020). "Depositors' insurer nears split from Central Bank". Business Daily Africa. Nairobi. Retrieved 7 February 2020.
- ^ Irungu, Geoffrey (26 June 2016). "Deposits insurer mulls new fund following recent bank failures". Business Daily Africa. Nairobi. Retrieved 27 June 2016.
- ^ a b Goitom, Hanibal (16 May 2012). "Kenya: Kenya Deposit Insurance Bill Becomes Law". Washington DC: Library of Congress. Retrieved 23 June 2016.
- ^ Ngigi, George (12 August 2014). "Deposit insurance fund hived off Central Bank of Kenya (CBK)". Business Daily Africa. Nairobi. Retrieved 23 June 2016.
- ^ BDA Reporter (14 August 2015). "Dubai Bank Kenya placed in receivership for a year". Business Daily Africa. Nairobi. Retrieved 23 June 2016.
- ^ Olingo, Alan (24 August 2015). "Central Bank of Kenya names liquidator for Dubai Bank". The EastAfrican. Nairobi. Retrieved 23 June 2016.
- ^ George Ngigi, and Brian Ngugi (13 October 2015). "Central Bank of Kenya puts Imperial Bank under statutory management". Daily Nation. Nairobi. Archived from the original on 12 June 2016. Retrieved 23 June 2016.
- ^ Anyanzwa, James (21 June 2016). "NIC to compensate Imperial Bank depositors in new deal". The EastAfrican. Nairobi. Retrieved 23 June 2016.
- ^ The EastAfrican (7 April 2016). "Kenya: Chase Bank Put Under Receivership". Nairobi: The EastAfrican via AllAfrica.com. Retrieved 23 June 2016.
- ^ Irungu, George (20 April 2016). "KCB to take over management of Chase Bank, will reopen next week". Business Daily Africa. Nairobi. Retrieved 23 June 2016.