Trustco drags central bank to court
Trustco Group Holdings and its subsidiary Trustco Bank Namibia are taking the Bank of Namibia to court in a bid to review several directives and decisions issued by the Bank.
Trustco in a statement announced that it filed the case in Windhoek High Court on Friday, 23 September 2022.
Trustco claims that during the last two years of correspondence between Trustco Bank, Trustco Group Holdings, and the Bank of Namibia, the central bank has denied Trustco the opportunity for its bank to enter full commercial banking operations, even after the group offered to capitalise on the bank’s balance sheet by a further N$1 billion.
Trustco claims the Bank of Namibia’s directives and opinions were unconstitutional.
In the case that they lodged, Trustco Bank and the Trustco group are also claiming that sections of the Banking Institutions Act of 1998 are unconstitutional, as they violate the constitutional prohibition of unfair discrimination and Trustco Bank’s right to carry on its business.
Trustco group managing director Quinton van Rooyen says article 101 of the Constitution compelled the parliament to take into consideration economic growth when it enacted the Banking Institutions Act.
He further claimed that the hiatus created by failing Namibian banks established after Namibia’s independence has left the majority of the Namibian banking sector under foreign control
“This results in a significant barrier of entry for a 100% Namibian-owned start-up bank like Trustco Bank to successfully enter the banking industry. Such a barrier to entry results in a loss of control for Namibia over its local economy,” van Rooyen added.
Reacting to the announcement, Bank of Namibia spokesperson Kazembire Zemburuka said that the central bank would defend its regulatory actions.
“The financial system remains stable and sound due to the effective regulatory and supervisory framework in place which fosters a world-class financial system,” Zemburuka stated.