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Client wants NBK’s Islamic banking shut in Sh3.7bn row

Isiolo governor Godana Doyo launches National Amanah in Isiolo last year. PHOTO | VIVIAN JEBET
Isiolo governor Godana Doyo launches National Amanah in Isiolo last year. PHOTO | VIVIAN JEBET 

A National Bank customer has asked the High Court to shut down the lender’s Islamic banking wing while demanding Sh3.7 billion compensation over a loan repayment dispute.

Tulla Reserve Supplies Limited has sued the lender for allegedly changing the terms of a Sh145 million loan it took under the lender’s National Amanah, a move the grains supplier says has led to a loss of business worth Sh3.7 billion.

The firm claims National Bank illegally changed his facility from a fixed term loan to a revolving musharaka loan, effectively raising the interest rate from 18.5 per cent to an Islamic profit-sharing equivalent of 19.5 per cent.

He now wants the court to order the Central Bank of Kenya to shut down the lender’s Islamic Banking wing.