Stanbic Bank Ordered to Pay Shs 90 Million for Closing Customer Account

The Commercial Court in Uganda has ordered Stanbic Bank to pay Shs 90 million in damages to a customer following the unlawful closure of his bank account. Justice Ginamia Melody Ngwatu ruled that the financial institution breached a 2012 consent agreement and defied a temporary injunction by blocking access to the account belonging to Dr. James Akampumuza Rutanga.

The legal battle began when Dr. Akampumuza visited the bank’s Kabale branch to withdraw funds, only to be informed that his account had been closed from Kampala. He was told to open a new account to continue banking services. Dr. Akampumuza argued that the sudden closure crippled his electoral campaigns at the time and contributed to his political defeat.

In his 2012 lawsuit, the customer accused the bank of undermining the fundamental customer-bank relationship. Although he initially sought Shs 3.7 billion in damages through a contempt of court application, Justice Ngwatu trimmed the payout to Shs 90 million, complete with an eight percent interest rate. Costs for the application were deferred pending the outcome of the main suit.

Stanbic Bank denied the allegations, maintaining that the customer had successfully withdrawn funds on multiple occasions and was merely asked to update his Know Your Customer (KYC) details. However, the court dismissed an affidavit submitted by the bank’s legal officer, citing a lack of proof regarding her authority to depone on the institution’s behalf.

Justice Ngwatu noted that both parties were fully aware of the 2012 consent order requiring the account to remain open while litigation was ongoing. Consequently, the court ruled that the bank knowingly violated judicial directives and restricted access to the customer’s legitimate funds.

Read the full story originally reported by The Observer at https://observer.ug/news/stanbic-fined-shs-90m-for-closing-customers-account.