NEDBANK Zimbabwe has been ordered to return close to $3 million it had unlawfully taken from its client, Mega Market (Private) Ltd, after making some foreign currency payment to the client’s suppliers.
Mega Market had sued Nedbank for unilaterally debiting and crediting its bank accounts applying the new monetary policy, promulgated under Statutory Instrument (SI) 33 of 2019, which made a distinction between US dollar RTGS.
Mutare High Court judge Justice Isaac Muzenda granted an application for a provisional order sought by Mega Market compelling the bank to return a total RTGS$2 898 695.71 unlawfully taken from its three accounts with the bank.
He ruled that there was no legal basis why Nedbank without the requisite mandate of its client proceed to debit Mega Market’s accounts not on instruction or notice as the jealously guarded etiquette of banking practice.
“Respondent shall cease unlawful debits and or credits of applicant’s bank accounts pending the finalisation of this urgent chamber application,” said Justice Muzenda.
Nedbank ran a bond note deposit promotion early last year, in which a client who deposited bond notes would be entitled to a foreign currency allocation equivalent to 50 percent of bond notes that were deposited.
Mega Market joined the fray and the deal went well until, the monetary policy change in February, when the bank sought to apply the statutory instrument in retrospect.
On March 21, Nedbank unilaterally debited and credited Mega Market’s bank accounts virtually applying the new monetary policy’s market oriented exchange rate.
The development saw a huge sum of RTGS debited from Mega Market accounts to offset the balances due to the bank.
This left Mega Market with an overdraft of RTGS1 188 191.38 after the bank debited to Mega Market’s account the some of RTGS2 174 871.54, without even giving prior notice to its client.
In his ruling, Justice Muzenda noted that though the bank did not openly concede, the interbank exchange rate it applied effectively was that stipulated under SI 33 of 2019 in retrospect.
“That statutory instrument does not provide for retrospect application.,” said Justice Muzenda.
“It is trite that a statute cannot be applied in retrospect to achieve an individual vested rights unless the concerned legislation expressly states so.”
The judge rejected Nedbank’s defence that it was recovering a debt due to it and also found that the debiting of Mega Market’s accounts resulted in the paralysis of its operation.