The Competition Authority of Kenya has ordered GT Bank Kenya Limited to pay a Sh33.18 million penalty and refund Sh13.21 million to ASL Limited after finding violations of the Competition Act involving false and misleading representations and unconscionable conduct in credit facility management.
In a decision released on February 24, 2026, the Authority said GT Bank engaged in conduct contrary to the Competition Act.
The case arose from a complaint lodged by ASL Limited on October 5, 2024, alleging unfair treatment in the management and renewal of its credit facilities.
ASL, a diversified Kenyan company operating in the manufacturing and industrial sectors, had maintained a banking relationship with GT Bank since 2001.
According to the findings, ASL secured credit facilities in July 2021, including overdrafts, letters of credit, guarantees, asset financing and working capital support, secured against company assets and personal guarantees.
The facilities were set to expire in May 2022, subject to review and renewal.
ASL submitted a renewal request in January 2022, within the agreed timeframe. However, the bank did not issue a definitive position despite months of engagement.
In June 2023, GT Bank offered a three-month extension and requested additional security. ASL accepted the revised conditions, including reducing one trading line from Sh709,500,000 (USD 5.5 million) to Sh451,500,000 (USD 3.5 million) and retaining cleared collateral.
The Authority noted that a month later, the bank issued a new offer letter further reducing limits by Sh387,000,000 (USD 3 million). ASL later indicated it intended to transfer its facilities to another bank.
On October 31, 2023, ASL received a default notice and was charged Sh13.2 million in default interest, allegedly backdated to August 2023, during the renewal process.
To facilitate the transfer and avoid disruptions, ASL cleared overdraft amounts totalling Sh417,848,415 and Sh25,516,458 (USD 197,802).
Although the bank had earlier offered to refund Sh2.8 million, ASL rejected the partial refund and sought full reimbursement.
The Authority’s investigation considered possible violations under Section 55 of the Competition Act on false or misleading representations, and Section 57 on unconscionable conduct.
After reviewing evidence, the Authority concluded that GT Bank violated Section 55(a)(ii) by, among other actions, continuing to charge fees for unapproved facilities, applying default interest retroactively without prior notice, and referring to materially altered offers as renewals.
The Authority also found violations under Section 57(1), stating that the bank possessed significantly higher bargaining power and imposed conditions not reasonably necessary to protect its legitimate interests.
It further cited backdating of charges and continued changes in terms as conduct that impaired ASL’s ability to negotiate effectively.
GT Bank had argued that the facilities were governed by Letters of Offer issued in 2021, which permitted variation of interest rates and default interest.
The bank denied coercion and described the partial refund as a goodwill gesture rather than an admission of liability.
However, the Authority determined that the conduct constituted both misleading representation and unconscionable business practice.
Under its guidelines, the Authority may impose penalties of up to 17 percent of a firm’s previous year’s gross annual turnover.
In this case, the penalty imposed represents 2 percent of GT Bank’s 2023 gross annual turnover, the Authority said, adding that mitigating and aggravating factors were considered to ensure proportionality.
The Authority ordered GT Bank to pay the penalty, refund ASL within 30 days, comply with the Competition Act and the Competition (General) Rules 2019, and sensitise its staff on the law’s provisions.
The decision reaffirms the regulator’s mandate to curb unfair commercial practices and protect consumers and businesses from exploitative conduct in the marketplace.
