Not upheld: Account closure without notice complaint against ALLICA BANK LIMITED

Decision detail

Summary

L, a company with two business current accounts at Allica Bank Limited, complained that Allica unfairly blocked and closed its accounts without proper explanation, causing significant business disruption. Allica had reviewed the accounts in April 2025 to comply with legal and regulatory obligations, blocked them during the review, and decided to close them in May 2025 with two months' notice, though the accounts remained blocked until closure. Mr R made multiple inquiries seeking explanation and access to funds, which were released on 2 June 2025. The ombudsman found that Allica's actions were legitimate and in line with its regulatory obligations and account terms, that financial institutions have the commercial right to decide whether to provide banking facilities, and that Allica was not obliged to disclose its reasons for closure. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Allica's review was legitimate and in line with its legal and regulatory obligations. The account terms permitted Allica to restrict access to funds and close accounts in certain circumstances. Allica met the criteria for immediate closure under its terms. Financial institutions have the commercial right to decide whether to provide banking facilities to customers, and this service will not ordinarily require a bank to keep a customer or compensate for account closure unless there is very good reason. Allica was not obliged to disclose the reasons for its decisions, and the ombudsman was satisfied the account funds were released without unnecessary delay given Allica's regulatory obligations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website