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{
    "id": 660907,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/660907/?format=api",
    "text_counter": 148,
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    "content": "(f) The matter is discussed between the CBK and KDIC. In other words, sharing of information and determination by the CBK, in consultation with the KDIC to place the bank under receivership. A team comprising the CBK - Governor and Deputy Governor and senior staff – actually consider the circumstances of the affected bank and determine the best course of action. (g) Formal letter of appointment of KDIC by the CBK as the receiver of the bank in question. (h) Press release to inform the public and gazettement of the receivership. That is the procedure that is followed. The second question was in relation to the extent to which the regulations were followed in placing Dubai Bank, Imperial Bank and Chase Bank under receivership. The procedure was followed in the case of all the three banks. For instance, Dubai Bank and Chase Bank were given an ample opportunity to remedy the violations and deficiencies. The CBK held several meetings with the two banks to discuss the violations and deficiencies. The CBK and KDIC deliberated at length on the adverse circumstances facing the two banks, the best course of action to take, its benefits to the institution’s depositors and creditors and possible adverse impact. There was also a formal appointment of the KDIC. In the case of Imperial Bank, the matter was discussed between the CBK and Imperial Bank’s board. It is the board that actually alerted the CBK of the violations. In fact, the violations and deficiencies were brought to the attention of the CBK by the board of Imperial Bank. Again, the CBK, KDIC and the board of Imperial Bank deliberated at length on the matter and considered all relevant issues, including the impact of the fraud at the bank on the capital adequacy, the money laundering offences that may have been committed, possibility of a bank run upon disclosure and so forth. All those things were looked at and the placement of the bank under receivership was intended to give the bank time to remedy the situation. The third question was to demonstrate whether the placing of the banks under receivership was the most appropriate course of action. All operations of the CBK are the responsibility of the Governor and his team, which includes the Deputy Governor and staff. Section 13 (3) of the CBK Act vests the executive authority of the CBK in the Governor. Therefore, all operational decisions of CBK are made in line with this mandate. The CBK Board is separate from the CBK management team and has oversight role as set out in Section 10 of the CBK Act. There is no overlap in their responsibilities. The role of the CBK management is to implement policies and laws, which fall under the CBK mandate. In line with that mandate, therefore, those three banks were placed under receivership. There are details providing the circumstances that led to the closure of Dubai Bank, Chase Bank and Imperial Bank. I will not go into the details because the Senator has them. The last question sought a clarification on the remedial actions being put in place by the CBK with respect to Imperial Bank. The Imperial Bank Limited (IBL) was placed under receivership on 31st October, 2015 after the discovery of unsafe and unsound practices. The senior management of the bank was suspended because of a possible culpability and successfully, the CBK engaged the shareholders in the recovery of the The electronic version of the Senate Hansard Report is for information purposes only. A certified version of this Report can be obtained from the Hansard Editor, Senate"
}