At the time KDIC was established in 2012, it was an integral part of the Central Bank of Kenya, the country's central bank and banking regulator. The law also established the Deposit Insurance Fund, replacing the Deposit Protection Fund. KDIC, by law is mandated to administer the Fund, by collecting contributions for the Fund from member institutions; and holding, managing, and applying the Fund. The KDIC also is mandated to receive, liquidate, and wind up institutions for which it is the designated receiver or liquidator, a function previously overseen by the Central Bank of Kenya. The KDIC Act mandates the Central Bank to appoint the KDIC as the sole and exclusive receiver of a member institution when the institution's obligations to creditors exceed its assets deliberately violates a regulatory or supervisory order fails to provide necessary access to inspectors or lacks general transparency is unable to meet any of its financial obligations, either now or in the near future engages in activities that violate any of the country's laws. In 2014, the law was amended and KDIC became separated from the Central Bank. KDIC collects a flat rate fee of 0.15 percent of all deposits from each member institution, adjustable at the discretion of KDIC. It also collects an additional fee based on the risk-adjusted percentage of their total deposit liabilities during the previous twelve months as calculated by KDIC.
Staffing
Following the hiring of a new CEO, KDIC is in the process of in its own staff, moving to its new premises and ceasing to depend on CBK staff. As of February 2020 KDIC employed 50 people, with the expectation to have 70 employees by mid 2020, and a total of 160 staff members by 2022.
Recent interventions
As at June 2016, KDIC has been called in to intervene, three times, by the Central Bank of Kenya, when member financial institutions fell foul of Kenya's banking laws and regulations, during the previous twelve months.
In August 2015, Dubai Bank Kenya, was placed under receivership by the CBK, on account of “serious cash-flow problems”. KDIC was called in to refund customer deposits. KDIC has recommended liquidation of the bank.
In October 2015, Imperial Bank Kenya failed due to “unsafe and unsound business conditions to transact business” that existed in the bank. KDIC was instructed to intervene by CBK. In June 2016, CBK agreed with NIC Bank to take over the 28 branches and all 470 former employees of Imperial Bank once the outstanding litigation is resolved.
In April 2016, Chase Bank Kenya failed and was placed under receivership by the Central Bank of Kenya, prompting KDIC to step in. Three weeks later, KCB Bank Kenya Limited was appointed receiver-manager of Chase, with all branches re-opening on 27 April 2015, under KCB oversight.
