Court Upholds Sacking of Co-op Bank Manager Over Fraud-Linked Dormant Accounts

Questions Raised After Court Backs Co-operative Bank in Suspicious Dormant Account Case

The Employment and Labour Relations Court has upheld the dismissal of a former Co-operative Bank of Kenya relationship manager accused of facilitating suspicious access to dormant customer accounts, including one reportedly belonging to a deceased customer.

The ruling has drawn attention to internal fraud risks within Kenya’s banking sector and the vulnerabilities surrounding dormant accounts, customer verification systems, and insider access to confidential financial information.

According to court findings reported in May 2026, the former employee, identified as Amos Koech, lost an unfair dismissal case against Co-operative Bank after the court found that the lender had valid grounds to terminate his employment over suspected fraud and breach of confidentiality procedures.

While the case does not amount to a criminal conviction for corruption or theft, court proceedings paint a troubling picture of alleged internal irregularities involving customer account access and attempted account reactivation under questionable circumstances.

What the Court Found

Court documents showed that the former employee had sued Co-operative Bank, arguing that his dismissal in November 2020 was unfair and malicious.

The ex-employee reportedly sought compensation, gratuity, salary damages, and reinstatement of banking privileges, maintaining that he had explained himself against accusations linking him to suspicious activity.

However, the bank defended its decision by arguing that internal investigations had uncovered irregular conduct involving dormant customer accounts.

According to evidence presented before the court, investigators concluded that the employee allegedly facilitated the reactivation of dormant accounts targeted by fraudsters impersonating genuine account holders.

One of the most concerning allegations involved an account belonging to a deceased customer.

Court records cited by local business media indicate that fraudsters allegedly attempted to revive the dormant account using forged documents, including what was described as a prison discharge certificate intended to justify prolonged account inactivity.

The bank maintained that the employee had contacted officials at another branch and facilitated activation of the account despite suspicious circumstances that suggested the person presenting themselves was not the legitimate account owner.

A second dormant account was also allegedly targeted through similar suspicious activity, raising fears that organized fraud networks may have been involved.

Evidence Presented by the Bank

One of the strongest elements of the bank’s defence reportedly involved digital audit trails and internal system logs.

According to the court, Co-operative Bank argued that system records showed the employee accessed sensitive customer accounts unrelated to his official duties.

The bank further stated that the activity violated customer confidentiality rules and internal ethics standards expected of banking staff.

In banking institutions, audit trails are considered key forms of evidence because they create digital records showing when an employee logs into a customer profile, views sensitive information, or initiates account-related processes.

The court appeared persuaded that the digital evidence, combined with internal investigations, created sufficient grounds for disciplinary action.

In its ruling, the judge reportedly held that suspicion of fraud in a banking environment—particularly when backed by audit logs and internal investigations—could constitute a valid reason for dismissal.

The court further emphasized that employees working in financial institutions are held to unusually high standards of integrity because of the sensitive nature of banking operations.

Why Dormant Accounts Are High-Risk Targets

Dormant accounts have increasingly become attractive targets for fraudsters across the banking industry.

In many cases, such accounts belong to deceased individuals, customers living abroad, or account holders who have not conducted transactions for extended periods.

Because account activity is minimal or absent, fraudsters sometimes attempt to exploit weak verification systems by impersonating genuine owners or presenting forged documentation.

At Co-operative Bank, dormant accounts reportedly require in-person verification and official documentation before activation—a safeguard designed to prevent unauthorized access.

Yet this case has raised concerns about whether insider cooperation can sometimes bypass institutional controls.

Industry experts have long warned that financial fraud frequently depends not only on external scammers but also on employees with privileged system access.

No Proof of Institutional Corruption

Despite the seriousness of the allegations, it is important to distinguish between employee misconduct and institutional wrongdoing.

There is currently no public evidence showing that senior Co-operative Bank management orchestrated or approved fraudulent activity in the matter.

Instead, the case centred on allegations against an individual employee and whether the bank acted lawfully in dismissing him.

In fact, the court ultimately sided with the bank, concluding that proper disciplinary procedures had been followed, including issuing a show-cause letter, conducting a hearing, and allowing an appeal process.

The ruling may strengthen the hand of Kenyan banks seeking to dismiss employees accused of suspicious internal conduct, especially where digital evidence and audit records exist.

Bigger Questions for Kenya’s Banking Sector

The case nevertheless highlights wider concerns about fraud prevention in Kenya’s financial sector.

As banking increasingly shifts to digital systems, insider threats, identity fraud, and customer data abuse remain persistent risks.

Questions are likely to continue over whether financial institutions are doing enough to monitor employee access to sensitive accounts and prevent suspicious account reactivations before funds disappear.

For customers, the case serves as a reminder of the importance of monitoring inactive accounts and ensuring next-of-kin documentation is properly updated—especially where deceased relatives may have dormant balances vulnerable to fraud attempts.

At the same time, the case underscores how banks are increasingly relying on technology, audit logs, and digital footprints to investigate suspicious employee behaviour and defend disciplinary action in court.

Sources: Business Daily Africa court report on the Employment and Labour Relations Court ruling; Co-operative Bank customer guidance on dormant account activation procedures.