The Central Bank of Kenya (CBK) has authorized the liquidation of Charterhouse Bank (CHB) Limited, naming the Kenya Deposit Insurance Corporation (KDIC) as the appointed liquidator. This decision followed a statutory management report submitted on May 6, 2021, which concluded that liquidation was necessary due to persistent regulatory noncompliance.
The CBK cited repeated violations of the Banking Act, including improper lending practices, inaccurate financial reporting, and failure to maintain proper customer documentation. The regulator emphasized that liquidation would ensure the orderly settlement of CHB's assets and liabilities to safeguard depositors, creditors, and the public interest.
Established in 1996 through the acquisition of Middle East Kenya Finance Limited, CHB transitioned to a full commercial bank in 1998. At its peak in 2006, the institution operated 10 branches across Nairobi, Kisumu, and Mombasa, including eight locations within Nakumatt Supermarket stores. By 2006, CHB held KSh 4 billion in assets and a 0.55% market share, with KSh 2.9 billion in loans and deposits. By 2020, its financial position would have placed it as the smallest bank in the sector.
CBK placed CHB under statutory management on June 23, 2006, following similar regulatory breaches. The intervention aimed to protect stakeholders amid growing financial instability. KDIC is expected to release details on the liquidation process and deposit reimbursements in the coming months.
