Banking

Depositors With Up To Ksh 500,000 To Access Their Money When A Bank Collapses

Depositors With Up To Ksh 500,000 To Access Their Money When A Bank Collapses

Depositors with up to 500,000 shillings will now be able to access their funds in the event that a bank collapses.

The new policy comes after KDIC revised its limits from 100,000 shillings, which is an effort to try and ensure that depositors, financial institutions and the general public are well protected when a bank has collapsed.

Those with 100,000 shillings and above have had to wait until a bank’s assets are liquidated to benefit from compensation.

KDIC which is mandated to perform this function on behalf of the Central Bank of Kenya increased the Revised Coverage Limit to 500,000.

Some banks which have collapsed have never compensated the depositors, leaving depositors with doubts whether their money is safe or not.

An example can be dated back to 2016, where chase bank was facing liquidation, leaving depositors stranded after the CBK placed it under receivership.

Read: CBK fails to meet Demonetization Target

Stakeholders in the financial sector have however assured Kenyans that their assets will be recovered if in any case, a bank is facing turbulences in its operations.

“The public assets will be fully covered in the unlikely event of a failure and account holders will access the money within 30 days,” KDIC chief executive Mohamud.A. Mohamud said.

Mohamud’s statement was amplified by the National Treasury Cabinet Secretary, Ukur Yattani, who said that at least 98 percent of deposits will be recovered in an event that a bank collapse.

Also See: Depositors With Up To Ksh 500,000 To Access Their Money When A Bank Collapses

This policy has been running since 1989 but has been unfavourable to most depositors with more than 100,000 shillings in their accounts.

Comment here