Central Bank of Kenya (CBK) on Friday placed Dubai Bank of Kenya under receivership for facing serious liquidity problems, it appointed Kenya Deposit Insurance Corporation as a receiver.
In a statement, the regulator said the bank is also experiencing capital deficiencies which has raised concerns that it will most likely not be able to meet its financial obligations as and when they fall due.
“One of our primary role as a regulator is to foster the liquidity, solvency and proper functioning of a stable market-based financial system. We have closely monitored Dubai Bank’s daily cash reserve ratio from 14th July 2015 when the bank began breaching its daily cash reserve ratio requirements,” said CBK in a statement.
“We have considered and determined that Dubai Bank’s violations of banking laws and regulations, including failure to maintain adequate capital and liquidity ratios as well as provisions for non-performing loans and weak corporate governance structures is detrimental to the interests of its depositors, creditors and the public,” said CBK.