Why Imperial Bank is at a better standing than Dubai Bank

While both Dubai Bank and Imperial Bank have been placed under receivership, it is emerging that Imperial Bank is at a better standing than Dubai Bank. The two banking entities were recently placed under receivership of the Kenya Deposit Insurance Corporation (KDIC ) as the law requires.

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From a legal standpoint, Imperial Bank is better placed because the main reason that the bank is under receivership is breach of the Central Bank regulations. It however does not have liquidation challenges which Dubai Bank had.

Lawyers from Ashitiva and Company Advocates explain that

“Bank wise, liquidation is a process of bring a Bank to an end or winding up as it would the case of an ordinary Company; that is the case for Dubai Bank. Receivership is placing a bank under statutory management of Kenya Deposit Insurance Corporation to supervise the management; that is the case for Imperial Bank.”


Many reasons can lead to a bank being put under receivership including when their liquidity is sound. Ideally, during the period under receivership, mostly 12 months, normal business transactions of the bank would continue albeit with some small challenges.


The lawyers argued that “Receivership is fairly good because its putting back things in order but Liquidation is a slightly a bad state of affairs because there is hardly turning back.”


“The guaranteed refunds for depositors is usually 100k but there are series of continuous payment to the depositors and creditors as the realization of Bank assets are done by KDIC,” they added.

Many Kenyans have raised concerns over these banks. Just today, Central Bank Governor gave assurances that Imperial Bank customers will be informed in a week’s time of the fate of the bank and advised on the way forward.  

Dr. Patrick Njoroge, the CBK Governor also took the opportunity to allay fears of any collapse in the banking sector.


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