Nairobi, July 8 -- Banks could face greater legal liability for delayed responses to suspected fraud after the High Court upheld a ruling that Family Bank breached its duty of care by failing to secure a customer's account promptly, following notification of unauthorised mobile banking transactions.

The court upheld a Small Claims Court decision requiring the lender to compensate a customer over fraudulent mobile banking withdrawals totalling Sh720,000, signalling that a bank's failure to act after receiving a fraud report can itself attract liability.

"A bank is the keeper of the gate through which its customer's money passes; where it is warned that the gate stands open and does not close it, it cannot afterwards be heard to say that ...