By Isaac Salima:
The Supreme Court of Appeal has ruled against the Reserve Bank of Malawi (RBM)’s decision to revoke the licence for proprietors of Finance Bank.
A seven-member panel of justices, led by Chief Justice Rizine Mzikamanda, heard a case where Finance Bank’s legal team challenged RBM’s decision to revoke the licence in 2005.
The court has also ordered RBM to compensate Finance Bank for loss of business and profits from 2005.
- Advertisement -
In its ruling, made yesterday, the court found out that the central bank’s decision was excessive, “as there were other regulatory measures that could have been used”.
- Advertisement -
Finance Bank was represented by Wapona Kita and Mordecai Msisha.
“All the judges unanimously agreed with us that RBM acted illegally by revoking the licence. Since we also applied for compensation, the court has also awarded us [compensation] and we have referred the matter back to our financial expert to do the calculations and we will get back to the court with figures,” Kita said.
RBM was represented in the matter by James Masumbu, who was not available for a comment on the ruling.
RBM closed Finance bank in 2005 for allegedly contravening banking laws.
- Advertisement -
The bank was accused of dealing in irregular foreign exchange transactions, with RBM also alleging that some bank accounts had not met proper requirements under the Know Your Customer requirement.
RBM cited violations which dated back to 1999.
Finance Bank took the matter to court in 2006, when one of its shareholders, Rajan Mahtani, challenged the revocation but lost the case in the Commercial Court Division
