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First Community Bank Hit With Panic Withdrawals

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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.

 

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

 

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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.

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.

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.

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