The High Court of Uganda has delivered a significant ruling against dfcu Bank, ordering the financial institution to immediately release approximately Shs 80 million in frozen customer funds. The decision marks a major setback for the bank, which was found to have unlawfully restricted access to the account.
In its judgment, the court ruled that dfcu Bank’s freezing of the customer’s account was illegal. The affected account, identified as No. 01071157642434, contained the disputed funds. The presiding judge determined that the bank’s actions lacked sufficient legal justification and ordered the institution to unfreeze the account within seven days from the date of the ruling. The court also awarded costs of the application to the applicant, meaning the bank will bear the legal expenses incurred during the proceedings.
The dispute arose after the customer challenged the bank’s decision to block access to the funds, prompting a High Court case that ultimately went in the customer’s favor. While publicly available details about the circumstances leading to the freeze remain limited—whether linked to suspected irregular transactions, compliance reviews, or internal risk controls—the court’s decision underscored that any restriction on a customer’s account must be grounded in clear legal authority.
The ruling adds to a growing list of legal battles involving dfcu Bank in recent years, including disputes with business entities and individual account holders over frozen accounts and contested transactions. Although some of those matters have involved substantial commercial interests, this case highlights broader concerns about customer rights and due process within Uganda’s banking sector.
Legal observers note that while banks have a duty to comply with anti-money laundering regulations and financial intelligence directives, such compliance must operate within the boundaries of the law. Courts have consistently emphasized that financial institutions cannot arbitrarily deny customers access to their own funds without proper legal backing or court orders.
For the affected customer, the decision offers immediate relief and restores access to Shs 80 million that had been out of reach. It also sends a wider signal reinforcing judicial oversight over banking practices and the protection of depositors against unlawful administrative actions.
As of the time of reporting, dfcu Bank had not issued a public statement indicating whether it intends to appeal the decision. Should an appeal be filed, the matter could proceed to a higher court for review.
The judgment serves as a reminder to financial institutions to strictly adhere to established legal procedures when placing restrictions on customer accounts. It also demonstrates the role of the judiciary in balancing regulatory compliance with the protection of individual rights.
Watchdog Uganda will continue to follow any further developments, including potential appeals and the broader implications of the ruling for banking customers across the country.
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