Malawi Supreme Court of Appeal has ordered Reserve Bank of Malawi (RBM) to pay Finance Bank Malawi (FBM) K300 billion, a reduction from the K1.1 trillion the defunct bank demanded.
According to a ruling by Supreme Court assistant registrar Ibrahim Hussein, K157.471 billion is for loss of business and profit, K138.124 billion for malfeasance in public office and K150 million for breach of constitutional rights.
The ruling, dated November 4 2026, also says FBM is entitled to K44.4 million in liquidated principal.
Reads the ruling in part: “Any party aggrieved with this order has a right to seek review within the prescribed time pursuant to Order I Rule 16 of the Rules of the Supreme Court.”
Attorney General Frank Mbeta, who represented the State, said yesterday: “More than a trillion kwacha has been deducted. The total is about K300 billion. But I will study the ruling and file for review.”
During assessment of damages, FBM’s lawyer Modecai Msisha said the Supreme Court order for damages to be assessed, “if any”, did not cast doubt on wrongdoing.
He said FBM had quantified the damage and that the claimed figure arose from the court order.
Msisha then asked the court to consider projected losses after the business stopped operating.
The bank relied on the evidence of Nkhuzo Kuwani, a financial adviser for Mahtani Group of Companies of Zambia, on the damage caused by RBM’s intervention.
Kuwani told the court that a forensic reconstruction put lost profits at $134 million (about K234.6 billion) while a National Bank of Malawi comparison produced $551 million (about K964.8 billion).
However, the State suggested that FBM be paid nominal damages, which are a small amount of money granted when a legal right has been violated.
But in the assessment ruling, Hussein said the Supreme Court directed that damages, “if any”, be assessed.
He said: “This court understands this directive as requiring consideration of the damages pleaded in the counterclaim and determination, having regard to the evidence, of which heads are established and in what amounts.”
The assessment followed a Supreme Court ruling of February 3 2026, which found that the central bank’s decision to revoke the bank’s licence in 2005 over alleged malpractices was unlawful.
Before the revocation of the licence, allegations included that the bank engaged in several malpractices such as opening ghost accounts that were used to externalise foreign currency.
The Supreme Court’s decision on February 3 attracted public debate, amid concerns that taxpayers could pay a heavy price for reckless decisions by individuals at the central bank.
On February 12 2026, the Malawi Law Society raised “serious concern” over the 12 years it took the court to deliver its judgement.
On February 13 2026, the Judiciary’s Chief Registrar Innocent Nebi issued a statement clarifying that the court had not awarded a specific monetary sum, but had instead directed that any damages be assessed by the assistant registrar of the Supreme Court of Appeal.
The case began in the High Court of Malawi Commercial Division in May 2005, when FBM filed a counterclaim for loss of business following the revocation of its banking licence.
In October 2014, the High Court awarded RBM K13 million and dismissed FBM’s counterclaim.
FBM was established in 1995.
After its licence was revoked in May 2005, the bank briefly resumed operations under the strict supervision of the central bank before closing permanently in January 2006.
