Nairobi, July 16 -- Kenya Commercial Bank (KCB) has lost a three-year court battle over a Sh2,050 mistaken mobile money transfer, with the court holding that banks have a duty to act promptly to preserve funds once notified of an erroneous payment.

The High Court upheld a Small Claims Court finding that KCB was negligent after failing to prevent withdrawal of the money despite receiving the customer's complaint within minutes of the transaction.

In a judgment that reinforces the legal duty of banks to take reasonable steps to safeguard disputed funds following reports of mistaken electronic transfers, the court held that while banks cannot unilaterally reverse erroneous transfers without the recipient's consent, they must act with reaso...