All is not well at First Community Bank with some depositors expressing fears that the lender could go down with their hard-earned cash reportedly due to liquidity problems. Sources at the bank who spoke to The Weekly Vision on condition of anonymity revealed that the bank has been struggling to survive since June 2022. The situation has since worsened leading to panic withdrawal by customers.
Investigations reveal that since November last year, most clients have not had access to most of their money with no tangible explanation given by the management. Sources divulged that the bank started facing liquidity problems in mid-2022, but the management dismissed the reports as rumours from ‘malicious sources’.
However, by October, the complaints had persisted, and a series of panic withdrawals badly hit the lender. What followed were panic withdrawals following their decision to place limits on cheque clearance and withdrawals following an advisory from the banking sector regulator.
When the majority of customers opted to close their accounts, the management promised them that they were working on ways to solve the liquidity problem, but close to three months down the line, nothing much changed.
Things only seem to be worse now, as some customers say they cannot access the capped amounts. By early January 2023, the maximum amount one could withdraw was Ksh. 20,000 per day. At one point late last year, the banks’ branches along Wabera and Kimathi Streets in Nairobi were turning away some clients who wanted to withdraw more than Ksh.10, 000.
In a statement, the bank acknowledged the challenge while saying that the problem is being felt in some of its branches. “We acknowledge that our customers may currently be experiencing challenges with some of their transactions occasioned by panic withdrawals informed by malicious rumors.”
“These unprecedented withdraws have caused a strain on our daily operations, necessitating the Bank under the guidance of the regulator to limit some services,” the Bank said in a statement.