With less than a week after the struggling Mauritius-backed lender State Bank of Mauritius (SBM Bank) announced plans to shut down five of its branches over shrinking account books, depositors have resorted to panic withdrawals further puncturing its capacity to withstand the hard economic times.
Insiders revealed top management could soon convene a crisis meeting to come up with an interim survival strategy to forestall any eventuality of the lender going under.
“There has been unprecedented panic withdrawals by our clients. Maybe this was triggered by the public declaration to close down five of our branches. That notwithstanding, the bank’s financial position is dire. The asset base is also wanting. Things might end up just like what happened to Chase Bank.” Our source disclosed.
Last week, the bank issued a notice to customers indicating intention to close down outlets in Ngara, Dagoretti, Lunga Lunga road, Jomvu and Mombasa (Moi Avenue) from December 12, 2020.
The latter branch will close last on December 30 while the other four outlets will close their doors to customers after December 11.
“We are reviewing the distribution of our branch network in light of proximity to our client locations and our other flagship branches…This review is necessary to rationalize our presence in different locations in light with current and potential client activity on one hand, and on the other, the related services required.” The bank said through a statement.
SBM will now operate 46 branches in the country with the majority of the outlets concentrated around Nairobi.
SBM is not new to controversy and internal fraudulent allegations.
Two years ago, the bank was investigated back in their home country by the Mauritius Central Bank over multi-million loan deal with a Kenyan consortium obtained through forgery.