By The Weekly Vision Reporter
The Competition Authority of Kenya (CAK) has imposed a Sh33.18 million financial penalty on Guaranty Trust Bank Kenya Limited after finding the lender guilty of engaging in unconscionable conduct in violation of the Competition Act.
The decision follows a formal investigation by the competition watchdog into the bank’s dealings with one of its corporate customers, ASL Limited. The Authority concluded that GT Bank had adopted a pattern of unfair and misleading practices that disadvantaged the customer and breached Kenya’s consumer protection laws. According to the CAK, the bank misrepresented the standard, quality and value of the financial services it offered while also introducing punitive charges without giving the customer adequate notice.
The investigation found that GT Bank retrospectively applied default interest on loan facilities, recalled credit facilities unfairly, imposed backdated fees, delayed communicating decisions on the renewal of banking facilities, and continued to levy default interest without first issuing formal notices or recalling the affected facilities.
The Authority ruled that these actions amounted to unconscionable conduct under the Competition Act, which prohibits businesses from exploiting consumers through unfair, misleading or oppressive practices.
As a consequence, CAK ordered GT Bank to pay an administrative penalty of Sh33,180,000. The Authority also directed the bank to refund Sh13,211,285 to ASL Limited, the complainant whose case triggered the investigation. Beyond the financial sanctions, GT Bank has been ordered to align its operations with the Competition Act and the Competition (General) Rules, 2019 to prevent similar violations in future.
The ruling sends a strong signal to Kenya’s banking sector that financial institutions are expected to deal with customers transparently, fairly and in good faith. It also reinforces the Competition Authority’s growing role in protecting consumers against unfair commercial practices beyond traditional competition matters such as mergers and market dominance.
Consumer protection has become an increasingly important component of the Competition Authority’s mandate, with the regulator taking a more proactive approach in investigating complaints involving misleading conduct, hidden charges, unfair contract terms and other practices that may exploit consumers.
For borrowers and businesses, the decision highlights the importance of lenders providing clear and timely communication on interest rates, facility renewals, loan recalls and any changes to contractual terms. It also demonstrates that customers who believe they have been subjected to unfair treatment have legal avenues for seeking redress.
