Cus­tomer sues banks over rates

Eq­uity Bank client God­frey Paul Oku­toyi sues lenders for il­le­gal in­ter­est rates

Business Daily (Kenya) - - FRONT PAGE - Brian Wa­suna bwa­suna@ke.na­tion­media.com

God­frey Paul Oku­toyi, an Eq­uity Bank cus­tomer, has sued all Kenyan lenders for al­leged il­le­gal in­ter­est rates. He wants all 11.8 mil­lion ac­count hold­ers be­tween 2001 and 2010 re­funded Sh195 bil­lion for charges levied with­out the Fi­nance min­is­ter’s con­sent.

God­frey Paul Oku­toyi, an Eq­uity Bank cus­tomer, has sued all Kenyan lenders for al­leged il­le­gal in­ter­est rates. He wants all 11.8 mil­lion ac­count hold­ers be­tween 2001 and 2010 re­funded Sh195 bil­lion for charges levied on them with­out the Fi­nance min­is­ter’s con­sent.

Mr Oku­toyi says in a class ac­tion suit against all com­mer­cial lenders op­er­at­ing in Kenya that on av­er­age, each of the 11.8 mil­lion ac­count holder paid charges amount­ing to Sh16,426 which should be re­funded in full.

He quotes the Bank­ing Sur­vey 2011, and says the Kenya Bankers As­so­ci­a­tion (KBA) — which is en­joined on be­half of lenders — is yet to con­test the doc­u­ment’s find­ings. The KBA has in its re­sponse held that Mr Oku­toyi has not en­joined in­di­vid­ual banks in the suit hence no or­ders can be legally sought against them.

The banks’ lobby adds that not all fail­ures in com­ply­ing with bank­ing pro­vi­sions amount to a con­tra­ven­tion of con­sumer rights. The KBA and the Cen­tral Bank of Kenya (CBK) in­sist that Mr Oku­toyi has not fur­nished the High Court with proof of in­creases in bank­ing charges or in­ter­est rates.

Mr Oku­toyi’s lawyer, Gichuki Waigwa, holds that CBK’S de­ci­sion to deny any il­le­gal bank­ing charges is ev­i­dence that the reg­u­la­tor has been sleep­ing on the job.

“Since Mr Olaka and the KBA have failed to deal with the fig­ures in the bank­ing sur­vey, the hon­ourable court should pre­sume the fig­ures as fac­tual and re­gard it as proof of the ex­is­tence of the said fig­ures. To dis­prove the fig­ures in the bank­ing sur­vey, it was in­cum­bent upon the re­spon­dents to pro­vide the re­spec­tive an­nual fi­nan­cial state­ments of each bank from 2001 to 2010.

“The fig­ure of Sh195.16 bil­lion is by all stan­dards hu­mon­gous. How­ever, the pe­ti­tioner re­it­er­ates the doc­trine of un­just en­rich­ment and the rem­edy of resti­tu­tion.

‘‘Ul­ti­mately, jus­tice must be re­alised re­gard­less of the con­se­quences,” Mr Waigwa says in writ­ten ar­gu­ments filed in court.

Mr Oku­toyi’s suit is the sec­ond class ac­tion against Kenyan lenders.

An­other bank cus­tomer, Rose Florence Wan­jiru, sued all lenders on sim­i­lar grounds. Her suit is on­go­ing and has at­tracted 187 bank cus­tomers.

FILE

REG­U­LA­TOR The Cen­tral Bank of Kenya head­quar­ters in Nairobi.

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