Customer : Case Studies
Category : Breach of Contract
Date : 21 August, 2015
Status : In Process
Alleged Breach of Contract
Complainant was an employee of the Botswana Government, a Medical Practitioner and an expatriate on contract terms. When his contract ended he was paid his gratuity which was deposited into his account. He had a loan contract, which was not properly being serviced, and the bank decided to put hold on his account under advice to him as he had previously ignored the banks call to discuss various issues relating to his loan. The intention of the bank was to discuss with him how to settle the arrears and the loan as his contract had expired. Within the same period his contract was renewed for another term. During pay- day he could not access any funds from his account as his account was blocked and hence approached the Banking Adjudicator.
Breach his contract as follows:
His claims were that the bank has breach his contract as follows:
-
The bank knew that he was on contract and failed to link his repayment period with his contract as is usually bank procedure.
-
The bank should not have granted him the loan at the first instance since the banks assessment of income to repayment ratio was above the 40% prescribed limit.
The Banking Adjudicator held that there was no breach on the part of the bank as this was purely a banks commercial decision and that banks procedures should not be made to be seen to be ‘hard and fast rules’ and in the process prejudice law abiding customers. The customer agreed with the terms and conditions of the loan and signed for the same without any cohesion or influence from anybody and this valid a valid contract.
- Since a new contact is now in place, they could consider allowing him to continue with the contract, having considered its credit risk assessment procedures, mandating the salary to the bank.
- And remove hold on the account.
- Settle the current loan with the gratuity and have the customer enter into a new contract, again based on the banks credit risk assessment procedures.
