NAIROBI, Kenya, Feb 24 – The Competition Authority of Kenya (CAK) has fined Guaranty Trust Bank Kenya Limited (GT Bank) Sh33.18 million for engaging in false and misleading representations and unconscionable conduct in its dealings with long-time customer ASL Limited.
In its decision released on February 24, 2026, the regulator also ordered the lender to refund ASL Sh13.21 million in fees and charges it found were improperly levied.
The ruling follows a complaint lodged in October 2024 by ASL, a diversified Kenyan manufacturer and distributor serving the construction and industrial sectors. The firm accused the bank of unfair treatment in the management and renewal of its credit facilities.
ASL had banked with GT Bank since 2001 and secured multiple facilities in July 2021, including overdrafts, letters of credit, guarantees and asset financing backed by company assets and directors’ personal guarantees. The facilities were due to expire in May 2022, subject to review and renewal.
Despite submitting a renewal request in January 2022 within the contractual timeline, ASL told the Authority that the bank failed to provide a definitive position for months.
In June 2023, GT Bank offered a three-month extension subject to additional security and revised terms, including a reduction of a $5.5 million trading line to $3.5 million. A month later, the bank issued a fresh offer letter further cutting limits by $3 million.
ASL indicated its intention to transfer its facilities to I&M Bank after finding the revised terms untenable.
On October 31, 2023, ASL received a formal default notice and was charged Sh13.2 million in default interest, allegedly backdated to August 2023—when renewal discussions were still ongoing.
To facilitate a takeover by I&M Bank and avoid operational disruption, ASL cleared overdraft balances of Sh417.8 million and USD 197,802.
The Authority found that the bank’s actions met the threshold for false or misleading representation under Section 55 of the Competition Act and unconscionable conduct under Section 57.
“Unconscionable conduct refers to business practices that are unfair and oppressive, particularly where businesses take advantage of consumers’ vulnerability, lack of knowledge, or unequal bargaining position,” CAK stated.
“False or misleading representation happens where a business provides false, incomplete, or deceptive information to a customer, or creates a false impression about various aspects of a good or service.”
GT Bank had argued that the credit facilities were governed by letters of offer issued in July and October 2021, which allowed for variation of interest rates and the charging of default interest.
However, the Authority concluded that the manner and timing of the bank’s actions—particularly amid ongoing renewal negotiations—breached fair competition standards.
