Mombasa, KENYA: With the recent happenings in Kenya’s banking sector it is very important for one to know what Bank Receivership is all about.
Baraka FM spoke to Felix Nyambu a Financial Advisor based in Mombasa, who has worked in the banking sector for over 15 years.
He explains all the important facts you need to know about Bank Receivership.
What is Receivership?
Felix: When the bank is under receivership, in simple terms it means the bank is closed from normal banking operations until corrective measures are taken. The bank is placed in the custodial responsibility of the Central bank.
Reasons for Receivership.
Felix: It could be caused by an un unfortunate situation where rumors spread and all customers go and withdraw their cash and it becomes hard for the bank to operate normally. In short if the bank no longer has money to run it’s operations.
What is Liquidity in banking?
Felix: Liquidity is the deposit base;the amount of money the bank has at it’s disposal. It varies with different banks according to the clients who deposit in that bank.
What happens to my money when a bank is placed under receivership?
Felix: You are not going to lose your money but the unfortunate bit is that you are not going to get your money at that particular point when you want it or need it. It’s an inconvenience that you have to endure for a while until the bank sorts itself out.
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