Phone dealers sue Stanbic Bank for allegedly overcharging on Sh100m loan

Stanbic Bank branch on Kenyatta Avenue, Nairobi. [File, Two businessmen have sued Stanbic Bank over Sh101 million loan whose interest they say has been accumulating. In the case filed at the Commercial Court, the businessmen, Nasser Abdulhamid and Makarim Omar, accuse the bank of allegedly breaching the duplum rule as the amount they have paid so far is four times more than the loan they had taken. In their case, the duo told the court that they have been in Samsung mobile phone dealership and Stanbic Bank clients for years. However, they alleged that the bank breached its end of the bargain by overcharging them and demanding for Sh163 million on top of the loan. They claimed that they have already paid the bank Sh466 million in a bid to clear the loan. However, the amount keeps on shooting up instead of reducing. "The unique circumstances of this loan account are that despite borrowing a total of Sh101 million and repaying a total of Sh466 million to date, this is a loan account whose balance has now increased to Sh163 million despite monthly repayments of both interest and principal, instead of reducing," reads part of the court documents filed before Justice Alnasir Visram. The two claimed that the tier one bank varied the interest rates without their knowledge or their approval. At the same time, they alleged that despite repaying the loan, they have to date not known the status of the loan account. "The bank deliberately did not provide the petitioners with the repayment transaction account statements for the entire duration of the loan period since 2011, as and when they ought to have and as mandated by law, and only provided the same on the June 16, 2025, when the petitioners put their foot down and stated that they had a constitutional right to information. Even then, questionable, doctored and or cooked statements were provided to them, hence this petition," alleged Abdulhamid and Makarim. The court heard that the two took Sh101 million and used five properties in Nairobi and Mombasa as security. "The expectation was that they would be issued with both the transaction account statement each month and in addition thereto be issued with each respective loan account statement so that they have accurate information on the performance of their loan,' the two said. They also accused the bank of converting their loan accounts into United States Dollars while they were allegedly receiving the money in Kenya shillings. According to Abdulhamid and Makarim, while the interest rate indicated by the bank was 13.5 per cent per annum, with a margin of plus 0.7 per cent, the more than 10 years they had paid ended up with higher balances than they had borrowed. They now want the court to force the bank to reconvert the loan into Kenyan shillings and re-compute the amount that has already been paid in order to ascertain if there is a debt or not. At the same time, they want the court to find that since the loan had allegedly attained the duplum rule threshold, then they have met the obligations. "The petitioners do not owe the bank the sums alleged or anything as they long attained the duplum rule thresholds, properties presently charged to the bank should unconditionally be released to the petitioners having duly fulfilled their obligations to the bank," the court heard.

Phone dealers sue Stanbic Bank for allegedly overcharging on Sh100m loan

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Phone dealers sue Stanbic Bank for allegedly overcharging on Sh100m loan

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