Nairobi News

President Uhuru Kenyatta has said owners of collapsed banks will be forced to return depositors’ money.

While promising that no depositor will lose their hard-earned money because of the ill actions of bank directors, the Head of State warned:

“Those who run banks will not be allowed to steal from depositors. The money will be paid by those owners who took massive loans and did not repay them.”

He spoke on Sunday at ACK St Andrew’s Cathedral in Thika, where he attended the Sunday service.

The President has already asked Treasury Cabinet Secretary Henry Rotich to ensure that customers in the banks that crashed get their money.

The President also supported Central Bank of Kenya Governor Patrick Njoroge’s crackdown on rogue banks, saying the financial sector must be strengthened to prevent it from crumbling.

However, he said, the sector was not in a crisis but only needed a clean-up to cure it from non-compliant lenders.

Speaking on Thursday night in Berlin, before he returned home from a state visit to Germany, President Kenyatta had said Dr Njoroge was in order to put struggling banks under receivership to safeguard depositors.

UNDER RECEIVERSHIP

“I am not worried about the banking sector,” said the President. “I support the Governor on this. He is saying we must strengthen and remove the weaknesses in the financial sector. I believe the Governor is doing the best for the sector. The banks must follow the law.”

Assuring Kenyans that the local banking sector is stable, he added:

“Cleaning up does not mean it is falling down. We must strengthen the financial sector as we move forward. I have emphasised to my Treasury Cabinet Secretary to ensure depositors, especially small depositors, are protected. This is the most important thing, I think. All depositors must remain protected.”

President Kenyatta urged those tasked with safeguarding Kenyans’ money not to use it for selfish gain.

However, Mandera Senator Billow Kerrow said the Governor had failed to see the bigger picture in the closure of Imperial Bank and Chase Bank.

He said those suffering after the closure are ordinary depositors and not the directors of the financial institutions.

Mr Kerrow, who is the chairman of the Senate Finance Committee, said the banks should have been given time to solve their financial problems instead of being put under receivership.

“Whilst condemning the manner in which the directors of Chase Bank reportedly took out unsecured insider loans, I wish to equally criticise the hasty and irrational manner in which CBK acted to place the bank under receivership, effectively sealing its fate and destroying the lives of many Kenyans,” said Mr Kerrow in a statement.