The Competition Authority of Kenya (CAK) has fined Guaranty Trust Bank Kenya Limited Ksh33.18 million for engaging in false and misleading representations as well as unconscionable conduct against its customer, ASL Limited.
In a statement issued on Tuesday, February 24, the regulator also directed the lender to refund Ksh13,211,285 to ASL, representing fees and charges found to have been improperly levied, in violation of the Competition Act.
CAK noted that the enforcement action stemmed from a formal complaint lodged by ASL in October 2024 concerning the management and renewal of its credit facilities.
Bank Punished for Revising Client’s Loan Terms Without Proper Notice. Photo: Courtesy.
The Competition Authority of Kenya (CAK) provided background on the long-standing banking relationship between ASL and Guaranty Trust Bank Kenya Limited, noting that the company had been a client of the lender for over two decades.
According to the Authority, ASL began banking with GT Bank in 2001 and, in July 2021, obtained a range of credit facilities.
These included overdrafts, letters of credit, guarantees, asset financing, and working capital support.
The facilities were secured using the company’s assets, alongside personal guarantees issued by ASL’s directors.
The Competition Authority of Kenya noted that the credit facilities were due to expire in May 2022, subject to review and renewal under the existing agreement.
ASL had formally applied for renewal within the stipulated period in January 2022.
The regulator noted that in June 2023, Guaranty Trust Bank Kenya Limited proposed a three-month extension to allow completion of the renewal process.
As part of the interim arrangement, ASL was required to provide additional security and comply with revised terms, including reducing one trading line from USD 5.5 million to USD 3.5 million and maintaining cleared collateral conditions the company accepted.
However, the dispute intensified after the bank later issued a new offer letter introducing further reductions to the facility limits.
CAK found that changes to ASL’s loan terms and the manner in which they were implemented breached consumer protection provisions under the Competition Act.
As a result, the Authority fined Guaranty Trust Bank Kenya Limited Ksh33.18 million equivalent to 2% of its 2023 gross annual turnover and ordered the lender to refund Ksh13.2 million in improperly levied charges within 30 days.
The bank was also directed to comply with the law and train its staff on consumer protection requirements.
Separately, the Office of the Data Protection Commissioner (ODPC) confirmed that biometric data previously collected from Kenyans by Tools For Humanity has been fully deleted, addressing public concerns over data retention.
