On 12th December, 2022 the Commission received a complaint on alleged misleading conduct and unconscionable conduct by National Bank of Malawi.

Specifically, it was alleged that, on 4th October 2019, he got a loan from the Respondent’s bank amounting to MK900,000.00. The arrangement was that the loan was to be deducted directly from the Complainant’s bank account for 36 months.

The Complainant indicated that when the Respondent started effecting deductions, he did not get any text alerts from the bank, as is usually the case for any transactions on the Complainant’s account. When the Complainant enquired he was told that it was because the standard practice was that a client who has a loan does not get loan deduction notifications. The Complainant nevertheless pressed for assurance that his loan deductions were being made.

The Complainant indeed got the repayment schedule in 2019 and later got an updated schedule in July 2020. The Complainant was, however surprised that a month or so after the bank sent the loan repayment schedule, he received a text alert that indicated that an amount had been deducted from his account servicing the subject loan. However, this only occurred for two months and then stopped.

It was further submitted that, on 10th October 2022, an amount of MK10,000.00 was deducted from the complainant’s account; and then after he got an email alert indicating that the amount was servicing the loan. When the Complainant engaged the Respondent, he was assured that this was the final deduction for his loan repayment.

However, on 19th October, 2022 another deduction amounting to MK15,000.00 was effected, which was surprising to the Complainant. When the Complainant engaged the Respondent, he was informed that the loan had not yet been settled due to a “technical error” in the bank’s system that resulted in the stoppage of the deductions from November 2021 to October 2022. The Complainant was further informed that he still owed the Respondent an amount of MK717,000.00.

Furthermore, on 25th October 2022, the Complainant received an email alert which indicated that an amount of MK600,000.00 had been deducted as loan repayment. The Complainant engaged the Respondent and he was assured that the amount would be credited back to his account by close of business on 26th October 2022, which was indeed effected. During a meeting with the Respondent on 28th November 2022, the Complainant was told that he should agree to a new loan repayment schedule commencing January 2023, under which he would be charged new interest rate. The Complainant objected to this demand considering that the reasons for the failure by the Respondent to effect the deductions was not his fault, but rather the bank’s system error.

The Complainant found the conduct by the Respondent of demanding that he should pay back the money at an adjusted interest rate as unfair and unjustified. The Complainant felt that he was being penalized for an occurrence which was not his fault, and therefore sought proper redress of the matter.

Following deliberations, the Commission resolved to issue the following Orders:

  1. That the Respondent should adopt the loan repayment schedule that was initially applied and maintain the same interest rate of 23.2%.
  2. That the Respondent should timely and effectively communicate with their customers on the status on loan deductions, particularly when the deductions have stopped.