Nairobi — Former Central Bank of Kenya (CBK) Governor Patrick Njoroge has said tough decisions had to be made during his tenure, including the closure of three banks.

In an interview on the CBK Governor Series, Njoroge said the closures were necessary because the banks had failed to comply with certain regulatory requirements.

The banks, which were closed in succession, included Dubai Bank, Imperial Bank and Chase Bank.

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According to Njoroge, the first bank he oversaw being shut down was Dubai Bank Kenya in August 2015 due to lack of liquidity, failure to meet statutory cash reserve requirements and operating parallel banking operations.

It was followed by Imperial Bank Kenya, which was placed under receivership in October 2015 after fraudulent activities by its former managing director were reported.

The third was Chase Bank Kenya, which, according to Njoroge, suffered massive cash withdrawals after information about the bank's financial records became public, revealing unapproved lending to insiders.

Njoroge said the closure of Chase Bank had a significant impact on the country's banking sector because of its diverse depositor base, resulting in a wider impact on depositors and the sector.

"You also had the problems that were becoming evident in some of the banks and a lot of forbearance before that and basically you know we had to deal with three banks in quick succession," Njoroge said.

"It was necessary to shut them down and really insist on what the rules were and that they follow the rules."

Njoroge said the closures ultimately helped restore discipline in the banking sector.

"I think (it) was good in the long run or even in the medium term because the banks began to do what they should have done," he said.

"So in a sense the culture began to change."