How Social Media Led To Chase Bank's Closure

The governor of Central Bank of Kenya (CBK), Patrick Njoroge, Thursday said authorities had zeroed in on social media users whom he blamed for the collapse of Chase Bank.

This is the second time the CBK is fingering the social media for instability in the banking system after making similar claims last year when a dubious list of distressed banks made electronic rounds.

“Social media is a key factor in the collapse of Chase Bank,” said Dr Njoroge during a Press briefing at Central Bank Thursday.

“People have used it in spreading unfounded rumours. There is a crackdown to arrest anyone involved in spreading the same.”

CBK says one suspect has been identified and arrested over spreading rumours.

He was among those using WhatsApp messaging service and other platforms to spread the rumours. The governor said he does not know when the bank, put under statutory management will resume operation.

Ironically, Chase Bank’s predecessor, United Bank, once associated with former powerful PS Ezekiel Oyugi, was one of the few to ever emerge from administration.

“It can only resume as soon as shareholders bring in resources,” he said.

The governor has laid similar conditions for revival of Imperial Bank, which the owners are yet to fulfil. Chase Bank chairman and MD resigned on Wednesday after the lender restated its financial results that revealed under-reported insider loans.

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