A Muslim association has sued the African Banking Corporation Ltd over the freezing of its bank accounts.
The East African Central Muslim Women Association has sued the bank stating that it is now unable to cater for alms during the month of Ramadhan which begun on June 18.
The association chairperson Parveen Adam and secretary Safia Butt stated in the suit that they were aggrieved that they cannot support the needy in the community.
The bank, they say, gave the reasons for freezing their accounts as failing to update their annual returns as is required by the Non-Governmental Organisation Co-ordination Act and the 1992 regulations.
The officials, however, argue that their association is not a NGO as alleged by the bank and therefore the Act is not applicable to them.
"A proper simple search with the Registrar of Societies would have confirmed that fact as opposed to the random erroneous and misconceived search allegedly conducted by the bank's lawyers," they stated in the suit.
Ms Adam stated in the suit that the organisation opened an account with the bank in 2010 as they were offered higher rates on the deposits.
She said that they provided the bank with the relevant documentation when they opened the account.
"These accounts were operated by us without any hindrance until November 17, 2014, when we received a letter informing us, without notice, that the accounts were frozen," she said.
The move by the bank, she added, was malicious and illegal.
She stated that the bank had no powers under the provisions of Central Bank of Kenya and the Banking Act to freeze the account.
"In any event, the association was entitled to be notified of the allegations made by the bank and be heard before the accounts were frozen," she further said.
They now want the court to direct the bank to lift its order freezing the accounts and an order issued for general damages for libel.