NCBA Bank Accused of Predatory Tactics as Court Halts Auction of Kisumu Businessman’s Properties

High Court Exposes NCBA’s Legal Breaches in Sh109.5 Million Loan Dispute, Grants Reprieve to Struggling Entrepreneur.

In a scathing rebuke to one of Kenya’s largest financial institutions, the High Court has temporarily barred NCBA Bank from auctioning properties belonging to prominent Kisumu businessman George Otieno Otwal, exposing what critics are calling a pattern of predatory lending and ruthless recovery practices by the bank.

Justice David Kemei’s ruling on February 28 laid bare NCBA’s failure to adhere to basic legal safeguards, granting Otwal a 90-day injunction after the bank allegedly ignored statutory requirements to notify him before seizing assets tied to a Sh109.5 million loan.

The decision has reignited debates over corporate accountability in Kenya’s banking sector, with NCBA cast as a villain prioritizing profit over people.

A Bank’s Heavy Hand

Otwal, who traded under Asembo Soko Limited, detailed a harrowing sequence of events in court filings: after Kisumu County Government demolitions crippled his hardware business in 2023, he claims NCBA Bank abandoned negotiations to restructure his loan and instead moved swiftly to auction his properties—including his family home—without proper notice.

“The statutory notices were never served. The bank unilaterally increased interest rates and listed my properties for sale at undervalued prices,” Otwal told the court, accusing NCBA of exploiting his misfortune to seize assets. “They showed no mercy, even as my livelihood collapsed.”

Court documents reveal Otwal’s business, which had serviced the loan reliably until the county’s evictions, was shuttered for nearly a year. His attempts to renegotiate terms were met with silence, he alleges, before discovering his properties—used as collateral—were quietly listed for auction.

Court Exposes NCBA’s “Procedural Arrogance”

Justice Kemei’s ruling struck at the heart of NCBA’s defense, emphasizing the bank’s “failure to serve mandatory 90-day statutory notices” and its opaque handling of interest rate hikes.

In a ruling that Kenya Insights has access to, the judge highlighted the omission of a crucial step by NCBA—a legal requirement intended to safeguard borrowers—which raised “serious concerns” regarding its recovery strategies.

“The statutory notice is not a triviality. It is a shield for borrowers against high-handed actions,” Justice Kemei stated, lambasting the bank for attempting to bypass due process.

While acknowledging NCBA’s right to recover debts, he condemned its “haste to auction” without transparency, particularly the lack of a reserve price—a move critics argue could have allowed NCBA to acquire Otwal’s properties at fire-sale rates.

NCBA defended its actions, insisting it followed “all legal steps” and accusing Otwal of “delaying tactics.” But the court rejected this narrative, highlighting the bank’s refusal to engage with Otwal’s restructuring pleas and its glaring procedural lapses.

Broken System, Broken Lives

Otwal’s case underscores a broader crisis for small businesses in Kenya, where lenders often face accusations of exploiting legal loopholes to dispossess borrowers facing temporary hardships. Banking sector advocates, however, argue that NCBA’s conduct exemplifies a troubling trend.

“This isn’t just about one loan—it’s about a system that allows banks to act as judge, jury, and executioner,” said financial rights activist Miriam Awuor. “When institutions like NCBA ignore statutory notices and manipulate interest rates, they’re not just violating laws—they’re destroying families.”

The court’s injunction offers Otwal a fleeting lifeline, but Justice Kemei warned that the reprieve is conditional: the businessman must resolve the case within 90 days or lose protection. For now, his family home remains intact, but the emotional toll is indelible.

The ruling deals a blow to NCBA’s public image, already under scrutiny following recent customer disputes over hidden fees and aggressive recoveries. While the bank retains the right to appeal, civil society groups are seizing on the case to demand stricter oversight of lending practices.

As Otwal fights to salvage his assets, his story has become a rallying cry for reform. “Banks cannot operate above the law,” he told reporters outside the courtroom. “NCBA tried to break me, but the court has shown that even the powerful can be held accountable.”

For NCBA, the verdict is a stark reminder: in the court of public opinion, procedural arrogance carries a steep cost.