Trustco Bank will have to wait for another week to hear if the court will temporarily freeze the Bank of Namibia (BoN)’s decision to shut its operations.
Windhoek High Court Judge Boas Usiku was expected to deliver a ruling on Trustco Bank’s urgent application to interdict BoN this week, but the parties were informed that the judgement was not ready, and would only be delivered on 29 September.
In August, Trustco Bank approached the High Court to seek an interim interdict against BoN’s directive to suspend its operations from 18 August.
The troubled bank further wants the court to order the central bank to withdraw and/or reverse all instructions emanating from the suspension given to the Payment Association of Namibia (PAN) and Namclear.
The interim interdict shall remain in force until the court pronounces itself on the review application.
The central bank temporarily suspended Trustco Bank, a subsidiary of Trustco Group Holdings (TGH), for six months, on condition that the local bank rectifies stipulated conditions.
The regulator, through its lawyer Terry Motau, said Trustco Bank’s suspension is not final, but the first step in a process to ensure that it meets its obligations within the given timeframe.
He said if the court grants the interim interdict, it would set a bad precedent that financial institutions do not need to comply with what the regulator tells them to do.
Furthermore, it would create an environment where banking institutions are not deterred from failing to comply with their conditions of licensing, or with the orders and directives issued by the regulator.
He said Trustco Bank will not suffer prejudice if the orders are not granted, as they can make submissions to the central bank within 14 days to persuade it to amend the suspension.
Motau continued that during the suspension period, customers will have access to their deposits at Trustco Bank. The bank is likewise permitted during the suspension period to accept repayments from its creditors, in compliance with such creditors’ loan repayment obligations existing as of the date of the notice of suspension.
However, Trustco Bank’s lawyer Dale Hinrichsen said if the court does not grant the interim interdict, BoN will be successful in its unconstitutional attempts to suspend its banking operations.
He said BoN will succeed under the guise of regulatory supervision to take the law into its own hands, despite the undecided pending litigation and court proceedings. The outcome of the pending review and liquidation application will thus become irrelevant.