GTBank Hit with $257,000 Penalty in Kenya Over Client Agreement Violation

Kenya’s Competition Authority (CAK) has hit Guaranty Trust Bank Kenya Limited, known as GTBank, with a fine of about $257,000, which is KSh33.18 million. The penalty comes after the bank was found guilty of false and misleading actions, plus unfair conduct, against one of its customers, ASL Limited.

In a statement released on Tuesday, February 24, 2026, CAK also ordered GTBank to refund around $102,000, or KSh13.21 million, in fees that were wrongly charged to ASL.

The trouble began in October 2024 when ASL, a company that makes and supplies products for construction and industrial work, complained about how GTBank handled and renewed its loans. ASL has been a customer of GTBank for more than 20 years, banking with them since 2001.

ASL filed the complaint on October 5, 2024. It said the bank treated it unfairly when managing and renewing its credit facilities. After a 16-month probe, CAK discovered serious problems. GTBank charged fees on loan parts that were not approved. It also lied to ASL about the status of its services. On top of that, the bank added default interest charges without warning and backdated them. It even changed loan terms quietly and passed them off as normal renewals.

GTBank Hit with $257,000 Penalty in Kenya

Here’s how it all unfolded. In July 2021, ASL got several credit options from GTBank. These included overdrafts, letters of credit, guarantees, and lines for working capital. They were secured by the company’s assets and guarantees from its directors. These facilities were due to end in May 2022.

ASL asked for a renewal in January 2022, well within the allowed time. But GTBank dragged its feet for months and did not approve it. Finally, in June 2023, the bank gave a short three-month extension. However, it demanded extra security and changed key terms. It cut the trading line from $5.5 million to $3.5 million and kept collateral that was already cleared.

Things got worse a month later. GTBank sent a new offer letter that slashed the limits by another $3 million. ASL needed time to think it over inside the company. They decided the new amounts and terms were not okay. So, ASL told GTBank they wanted to move their facilities to I&M Bank.

Right after that, in October 2023, GTBank sent ASL a formal notice saying they were in default. The bank then charged KSh13.2 million in default interest, backdated to August 2023. To switch banks smoothly and keep business running, ASL paid off its overdraft of KSh417.8 million and $197,802. GTBank offered to give back KSh2.8 million as a goodwill act, but ASL said no. They wanted a full refund.

CAK’s investigation showed that GTBank’s changes to loan terms and how they handled them broke Kenya’s Competition Act on consumer protection. The authority hit the bank with the fine and strict orders.

CAK set the penalty at 2% of GTBank’s gross annual turnover for 2023. This is lower than the maximum 10% allowed. They considered good and bad factors from their guidelines. The orders require GTBank to pay KSh33.18 million and refund KSh13.21 million to ASL within 30 days.

This case highlights the need for banks to be honest and fair with long-time customers. It serves as a warning to other lenders in Kenya to follow rules on loans and fees.

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