Equity Bank. Photo | courtesy.
Equity Bank has been ordered to pay Sh450,726 to a customer after the High Court found the lender negligent for failing to act swiftly in a fraud case reported in 2019.
Justice Julius Ng’arng’ar upheld a 2022 decision by a lower court, ruling that the bank breached its duty of care by delaying investigations for over nine months despite early notification from the victim.
The case involved Peterson Kagai, who lost more than Sh600,000 from his account after being drugged and robbed in November 2019.
Kagai reported the incident to the police and Equity Bank just days after the theft occurred. However, the bank only initiated its internal probe nearly a year later.
In his judgment delivered on June 7, 2025, Justice Ng’arng’ar said the bank’s conduct amounted to gross negligence.
“This delay was inexcusable,” the judge stated. “The bank had a responsibility to act with urgency once notified of the fraud. Its inaction left the customer exposed.”
The court also noted that part of the stolen funds was withdrawn through a mobile banking service, which Kagai had never activated.
During trial proceedings, Kagai testified that he had not enrolled for mobile banking and questioned how the thieves were able to access his account via that channel.
“The bank’s explanation was insufficient,” Justice Ng’arng’ar ruled. “Its investigation left a lot to be desired.”
Equity Bank had filed an appeal, arguing that the customer should have taken more precautions and that the fraud was outside its control.
But the judge disagreed, citing the bank’s failure to protect customer funds once it had been alerted.
This case adds to growing concerns around the responsiveness of financial institutions in handling fraud incidents, especially in the era of rising cybercrime.
Kagai expressed relief after the ruling, saying: “It’s been a long battle. I’m happy the court saw the truth. Banks need to take responsibility.”
