To get in touch with me please email gatwiri@kelliemurungi.com

This morning, I was at a meeting with a friend who had been a Chase Bank client for years, till the bank went into receivership last year. 4 days ago, the Central Bank of Kenya announced that Chase Bank’s receivership had been extended for a further 6 months to September, in a bid to find a buyer for the bank. Shortly after its collapse last year, the CBK Governor had announced that Chase had many suitors, we were not told what happened to cause them to back off.

“The world” seems to have moved on from Chase Bank. The small depositors, those with less than 1 million shillings in the bank, were paid off, they were many. We have forgotten that many other small people, especially small businesses still have money embargoed in the bank.

My friend is one of those people.

Her business barely survived last year, as her working capital funds were locked in Chase Bank. Her banking history with Chase has not helped her one bit with her new business bank, a situation that has been aggravated by the interest rate cap, that saw banks slow down on unsecured business lending.

Now, my friend had a loan with Chase Bank. She stopped repaying the loan, because she  needed every cent to keep her business going, awaiting the March 31st 2017 date, after which she would be able to access the remainder of her funds.  As a rational human being, she reasoned that since Chase Bank has her money, then they should not have a problem with her deferring her payments to them.

How wrong she was! Chase Bank has gone ahead and listed her with the Credit Reference Bureau (CRB) as a loan defaulter. She, and other Kenyan businesses that banked with Chase Bank can now not access any form of financing from any bank in Kenya.

The nerve!

So here we have a bank whose directors are said to have robbed it blind grossly mismanaged it so much that no buyer in the market wants anything to do with it, reporting its customers as criminals – it is a crime to not repay your loan. My friend has visited Chase Bank countless times to ask why they will not allow her to offset her loan against her deposits;

“We are not allowed to do that Madam”

Is the answer she gets from Chase Bank’s well coiffed relationship managers.

Well, they are also not allowed to steal misappropriate depositors’ monies, but here we are!

Look, extraordinary times call for extraordinary measures. When we deposit money in the bank, we are entrusting it with the system because we trust the CBK as the oversight body. When that trust has been betrayed, we should not then be the ones to pay for it.  The CBK needs to re-look at that provision that allows banks in receivership to harass their customers for loans, while the customers’ monies are locked up in the banks. It is unacceptable, and a double punishment.

Meanwhile, Chase Bank directors are free as birds!

 

One Comment
 
  1. bankelele April 5, 2017 at 7:37 pm Reply

    An unfortunate situation. Whoever is running Chase (the receiver manager), while they have an obligation to collect debts owed to the bank, is wrong for listing customers who genuinely can’t pay – and more so if their savings were at Chase.

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About the Author

When I’m not here writing, I run Lattice Training, where we offer customized training solutions for businesses of all sizes, from startup entrepreneurs all the way to large corporations.
The aim of this blog is to simplify personal finance. I write about budgeting, personal finance, management and doing business in Kenya, in a way that everyone will understand.

If you have questions or would like to get in touch with me, leave your details on the form below, and I will get in touch. Thanks for reading.

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