GT Bank appeals CAK order after regulator cites misleading representation

In a statement, the bank said the matter is now sub judice, and it would therefore be inappropriate to comment extensively while it is pending before the tribunal.

GT Bank maintained that its conduct in its banking relationship with ASL Limited was consistent with its contractual obligations and in compliance with applicable banking laws and regulations.

“The decision to appeal reflects the Bank's view that the Authority's findings are not supported by the facts and evidence presented during the investigation,” the lender said, adding that it values its commitment to fair treatment of customers and expects the appellate process to allow a fuller consideration of the matter.

The appeal follows CAK’s decision ordering the bank to pay a Sh33.18 million penalty for what the Authority termed false representation and unconscionable conduct against ASL. CAK also directed GT Bank to refund Sh13,211,285 to ASL in fees it said were improperly levied.

CAK said the probe was triggered by a complaint lodged by ASL on October 5, 2024, in which the company cited unfair treatment in the management and renewal of its credit facilities. The Authority said ASL has banked with GT Bank since 2001, and held credit facilities including overdrafts, letters of credit, guarantees, asset financing and working capital support.

According to CAK, the dispute arose after the bank allegedly declined to give a definitive reason for failing to renew ASL’s facilities in 2022 as they neared expiry. CAK said that in June 2023, GT Bank offered a three-month extension as the renewal process continued, requiring ASL to provide additional security and meet revised terms — including reducing one trading line from USD 5.5 million to USD 3.5 million and retaining cleared collateral.

However, CAK said the bank later reduced the offer letter by a further USD 3 million, prompting ASL to consider moving to another lender. The Authority said GT Bank then issued a formal default notice and levied Sh13.2 million in default interest that ASL claimed was backdated to August 2023.

CAK said the bank offered to refund Sh2.8 million against the disputed amount, but ASL rejected the offer and sought a full refund. GT Bank denied allegations of coercion, arguing that ASL’s failure to execute a July 2023 offer triggered contractual default provisions, and that the default interest was not backdated.

“Upon analyzing the evidentiary information, the Authority determined that GT Bank violated Section 55(a)(ii) of the Competition Act on false or misleading representation,” CAK said