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Commercial Bank Lending Rates Under Scrutiny

A recent court case has shed light on the prevailing commercial bank lending rates in the market, with experts weighing in on the impact of such rates on borrowers.

Background Information

According to court documents, a plaintiff is seeking compensation from a defendant for alleged fraudulent transactions amounting to MK3,359,656.00. The defendant has countered, claiming the same amount plus interest and costs.

The case revolves around a merchant agreement between the parties, which was executed in 2002. The agreement outlines the terms and conditions of their relationship, including procedures for handling transactions.

Testimony

Two witnesses were called to testify in the case: Mr. Gaver Chawanangwa Ziba, a forensic officer, presented evidence on behalf of the plaintiff, while Mr. Esa Arab testified for the defendant.

However, things took a turn when First National Bank, acting as agent for the plaintiff, received a letter from the defendant seeking clarification on visa/master card transactions. The bank responded, advising the defendant to continue following the current procedure and obtain card numbers and passport numbers of partners.

But it was later discovered that all recent transactions deposited by the defendant were identified as fraudulent. First National Bank exonerated itself from liability, citing Clause 15 of the Merchant Agreement.

Expert Opinion

The plaintiff’s witness argued that the defendant failed to follow procedures outlined in the agreement, including obtaining prior authorization for excess transactions and adhering to Reserve Bank of Malawi Exchange Control procedures.

Experts say that commercial bank lending rates can have a significant impact on borrowers, particularly small businesses and individuals. “The high interest rates charged by banks can be crippling for those who are already struggling to make ends meet,” said a financial expert. “It’s crucial that banks take a more considerate approach when setting their lending rates.”

Conclusion

The court is expected to deliberate on the case soon, with the outcome likely to have far-reaching implications for commercial bank lending rates in the country.

Sources:

• Court documents
• Financial experts