Central Bank of Kenya (CBK) has revealed that a director at Chase Bank had illegally lent himself Sh7.9 Billion in formm of loan leading to the financial crisis that saw Chase Bank put under receivership.
Its said that the director took the loan illegally without bringing any collateral on board. Being a significant shareholder the director did not bring on board any referee thus ruining the financial cash-flows of the bank.
CBK revealed that insider loans, money advanced to directors, shareholders, associates and employees of a bank, stood at Sh13.62 Billion last year against the Sh5.72 Billion Chase Bank had reported on March this year. The insider borrowing was even more than the Chase Bank’s total shareholder funds (equity), which stood at Sh11.19 Billion.
This is the 3rd bank now to be put under CBK’s control in the past year.