Regulator’s silence on FCB’s cash crisis worries depositors
By John Otini, October 7, 2022The liquidity crunch at First Community Bank (FCB) has turned the spotlight on the Central Bank of Kenya (CBK) and the health of lower-tiered lenders after the regulator and the FCB board remained tight-lipped when time depositors sought answers on the state of the lender.
A tight-lipped regulator did not answer media queries on FCB last week over the issue but said all lenders can access short-term loans to forestall any liquidity crisis, even as some depositors at FCB claimed this week they were unable to access all of the funds.
Banking services
“First of all, I was one of those customers that never received any communication about the above! Secondly, your mobile banking services are not working, it’s been a week! Why are you holding us hostage? Why is there no one at customer service?” S. D. Onyango, one of the bank customers.
“You have frustrated us with limiting withdrawals to as low as 10k per day. We deposit $ but we are forced to withdraw Sh..pathetic!!,” said Khadija Thabit, another customer on social media. In a statement to reassure the public of the safety of the money, but which was quickly retracted, the lender called social media claims malicious.
The biggest Islamic bank in the country said in the statement that “rumours circulating on social media over the position of the bank and believed to have originated from malicious sources are causing concern and panic withdrawals.
“The bank experienced system disruptions that affected most of our services causing a backlog. We are working with the regulator to have services back up in 48hrs,” the lender said but customers say they are not happy.
The bank’s unaudited financial results show that it made a profit of Sh185 million in the six months to June 2022 up from Sh157 million during the same period last year.
During the last banking sector crisis when several banks including Chase Bank were in turmoil, CBK said it was ready to provide an endless supply of cash to banks. On Friday, the regulator said all banks have access to significant instruments both in the central bank and interbank market and the bilateral lateral lines with banks.