× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Court summons Absa Bank over Islamic banking facility

BUSINESS
By Ishaq Jumbe | February 28th 2020

A Mombasa court has summoned the head of Islamic banking at Absa Bank to shed light in a case where the lender is being accused of charging conventional banking interest on a shariah-compliant facility.

The bank is involved in a legal tussle with A.O Bayusuf and Sons over Sh25 million interest charged on a Sh300 million loan that Absa - formerly Barclays Bank - had advanced the client.

Saeed Ali, lawyer for the Bayusuf, asked the court to summon the Islamic banking expert to determine the nature of the facility the customer applied for.

“We are requesting the court to summon the chairman of the Shariah Board of the bank to come to court to give evidence as regards Murabaha facility,” he said.

The move was opposed by Absa Bank, which claimed that the plaintiff was summoning someone from the defence to give evidence against them.

“During the case conference before your honor, all parties confirmed they were satisfied with what had been presented and an order to proceed on what was on record agreed upon,” said Kongere Billy, representing the bank.

But the judge, PJ Otieno, said a rule that bars the additional inclusion of additional evidence midstream should never be used as a handmaiden of justice.

“We should not therefore lock out evidence that is important to the case,” said the judge.

The case was adjourned to April 30, when the expert is expected to help the court determine the nature of the loan.

Bayusuf and Sons, one of the oldest logistics companies at the Coast, accused the bank of peddling conventional loans in the guise of Islamic, interest-free facilities to enrich itself at the expense of unsuspecting customers.

“In fact, the mere mention of a deposit negates the essence of a Murabaha loan facility,” said witness Abdalla Ali Salim in his statement.

Share this story
Kenya Power dismisses 110 staff over fraud in one year
Fraud and illegal connections contributed to the decline in financial performance.
Dog walking becomes the newest hustle in town
Dog walking is now a status symbol. Owning a pet is cool. I nowadays meet lots of Kenyans and foreigners walking their dogs and some running.
.
RECOMMENDED NEWS
Feedback