Resolution is the disposition plan and process for resolving a non-viable bank. The tools for resolution include: Liquidation and depositor reimbursement, Open bank Assistance, purchase and assumption (transfer and/or sale of assets and liabilities), bridge bank, Bail-in (the write-down of debt or conversion to equity)
One important statutory mandate of KDIC is to ensure that failing/failed institutions are resolved in a timely and efficient manner. This is supported by the existence of legal powers through the KDI Act 2012 that supports early intervention and prompt corrective action, the ability to close troubled banks promptly, and orderly liquidation of assets and resolution of creditors’ claims.
KDIC in collaboration with CBK has adopted the following failure resolution mechanisms:
- Financial Assistance
- Purchase and Assumption (P&A)
- Bridge Bank
- Depositor Reimbursement (Payout)