First Community Bank Hit With Panic Withdrawals

First Community Bank (FCB) one of the leading Islamic banks in Kenya has been battling the horror of banking, panic withdrawals from customers following malicious rumors from what we gather allegedly emanated from former employees.

The rumors were further accelerated by the news from US that the feds were going after Sh30B stolen from the Covid funds and indicated to have been laundered into Kenya through banks and real estate agencies.

The Bank immediately experienced unusual behavior as customers believed the rumors and rushed to withdraw their money out the fear of losing their savings.

What's happening to First Community Bank Mombasa, they have limited access as depositors are crowded outside. There's no official statement but they have capped withdrawal limits

— SᗯᗩᕼIᒪI~ᑭᑌᑎᗪIT (@YussufMwinyi) September 23, 2022

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What is wrong with First Community Bank. This is long overdue. Clients have been subjected to financial distress https://t.co/4kX3x31WtS

— Siyad Ahmed (@HamedSiyad) October 1, 2022

Hello good what’s happening with my good bank first community bank @fcb_interact ,my land lord called me telling me not to send the monthly rent to the bank which I have been sending to for the last one year plus ,I have no idea what’s up.@Asmali77 @ahmednasirlaw

— Abdirizak Mohamed Abdi (@gufow) September 29, 2022

@fcb_interact frustrating it's customers by withholding customer deposits for over 3 weeks. We need our money. Retweet if u are affected

— Balkheisa Omar (@BalkheisaO) September 30, 2022

In a swift move, the bank confirmed the existence of the claims and immediately issued a press statement aimed at calming the distressed customers.

Service Update #fcbcares pic.twitter.com/VBC7lz7V8J

— First Community Bank (@fcb_interact) September 23, 2022

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Despite the assurances given, over two weeks into the crisis, customers continue to air their frustrations on social media pointing at a major problem with the bank. Many are complaining that the bank has capped their withdrawals in what can be read as a strategy to avoid a possible bank run.

What is happening at First Community Bank? client withdrawals has been limited to 100K (which is not even available) per customer per day, and online banking is no longer operational

We have been reduced to poor millionaires. https://t.co/mKik2VBcYz

— Veronica Hope (@VeronicaHope_) October 1, 2022

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CBK the body responsible for streamlining the banking system and cushioning customers is yet to  issue a public statement on the matter perhaps playing safe to avoid further pushing the panic button. In the past, panic withdrawals led to ultimate fall of Chase Bank and with this in mind, many are not willing to second guess.

First Community Bank has also been put on spot by its client for breach of contract and charging interest against Islamic Financing Agreement,(Musharaka).

The Bank was also controversially mentioned in the  KEMSA millionaires scandal where one of its alleged shareholders Halakhe Waqo brokered a Sh350M deal.

Faced with claims that the bank was facing liquidity crunch, they dismissed it. Most of inquiries on social media have gone unanswered as a check on their Twitter account shows they stopped tweeting on 22nd September.

Hello, we posted our half year performance on all our platforms, our business is growing because of your continued patronage.

— First Community Bank (@fcb_interact) September 22, 2022

As the bank fights for its life, the biggest challenge will be how they’ll be able to regain customer’s confidence even after this crisis. Ultimately, the silence from governing body CBK is concerning.