Trustco Bank Namibia Ltd (TBN) and the Trustco Group Holdings (TGH) have dragged the Bank of Namibia (BoN) to court after it has declined a N$1 billion capitalisation plan aimed at allowing the group’s banking unit to enter full commercial banking operations.
TBN and TGH are seeking a review of several directives and decisions issued by BoN against the group’s banking unit since 25 July 2022.
“In terms of the notice, TGH and TBN claim that the directives and decisions issued by BoN were unconstitutional on several grounds. Firstly, that sections 72A and 73B of the Banking Institutions Act 2 of 1998 (the Act) are unconstitutional, as they violate Article 10(1) of the Namibian Constitution, practising unfair discrimination, as it only allows certain orders to be reviewed.
Dr Quinton van Rooyen, Group MD of Trustco Group said “Article 101 of the constitution compelled Parliament to take into consideration economic growth when it enacted the legislation under discussion. Not once, not even a single time, did Parliament use the concept of economic growth in any of these Acts. In fact, the long title of the Banking Institutions Act emphasises only ‘control, supervision and regulations’. The ‘developmental mindset’ is detrimental to economic growth as well as wealth creation for all Namibians and our constitutional writers had exactly that in mind when article 98 was adopted from the ruling parties’ Constitution.”
Contacted for comment, BoN Director for Strategic Communications and International Relations Kazembire Zemburuka said, “the Bank of Namibia has taken note of the legal action launched by Trustco Bank. The Bank will vigorously defend its supervisory 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.”
According to Trustco Group, its current investment in Trustco Bank represents 1% of its net assets of N$6.5 billion.