Godfrey Paul Okutoyi, an Equity Bank #ticker:EQTY customer, has sued all Kenyan lenders for alleged illegal interest rates. He wants all 11.8 million account holders between 2001 and 2010 refunded Sh195 billion for charges levied on them without the Finance minister’s consent.
Mr Okutoyi says in a class action suit against all commercial lenders operating in Kenya that on average, each of the 11.8 million account holder paid charges amounting to Sh16,426 which should be refunded in full.
He quotes the Banking Survey 2011, and says the Kenya Bankers Association (KBA) — which is enjoined on behalf of lenders — is yet to contest the document’s findings.
The KBA has in its response held that Mr Okutoyi has not enjoined individual banks in the suit hence no orders can be legally sought against them.
The banks’ lobby adds that not all failures in complying with banking provisions amount to a contravention of consumer rights.
The KBA and the Central Bank of Kenya (CBK) insist that Mr Okutoyi has not furnished the High Court with proof of increases in banking charges or interest rates.
Mr Okutoyi’s lawyer, Gichuki Waigwa, holds that CBK’s decision to deny any illegal banking charges is evidence that the regulator has been sleeping on the job.
“Since Mr Olaka and the KBA have failed to deal with the figures in the banking survey, the honourable court should presume the figures as factual and regard it as proof of the existence of the said figures. To disprove the figures in the banking survey, it was incumbent upon the respondents to provide the respective annual financial statements of each bank from 2001 to 2010.
“The figure of Sh195.16 billion is by all standards humongous. However, the petitioner reiterates the doctrine of unjust enrichment and the remedy of restitution.
‘‘Ultimately, justice must be realised regardless of the consequences,” Mr Waigwa says in written arguments filed in court.
Mr Okutoyi’s suit is the second class action against Kenyan lenders.
Another bank customer, Rose Florence Wanjiru, sued all lenders on similar grounds. Her suit is ongoing and has attracted 187 bank customers.