A bank has sued another one seeking to recover over Sh7.8 million earned in interest.
Indo Africa Finance Limited has filed a case against African Banking Corporation Limited (ABC) claiming that it has failed to pay it accrued interest of Sh7,895,069.55 despite several demands.
Indo alleges that ABC failed to honour a Sh150 million bank guarantee it had signed to finance the Youth Enterprise Development Fund Board (YEDF) projects in 2012.
As a result of the Sh150 million bank guarantee with ABC, Indo says it agreed with YEDF that it will grant it a loan of Sh750 million to finance youth projects across the country. ABC has been accused of failing to honour its obligations to its customers.
"ABC did not honour its part of the agreement to avail Sh150 million despite Indo depositing with it Sh50 million as part of the deal," lawyer Titus Koceyo told Justice Francis Gikonyo, who certified the case urgent.
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Mr Koceyo told Justice Gikonyo that the Sh7.8 million being demanded now is the interest earned from the Sh50 million deposited by Indo with ABC.
The court heard that ABC cancelled the bank guarantee and communicated to YEDF, thereby occasioning Indo to lose the Sh750 million loan portfolio it had arranged with the youth fund board.
The case will be heard August 28.
