Between 2009 and 2011, Stanbic Bank Zambia enticed civil servants especially teachers to close their existing bank accounts in other commercial banks and instead open new ones in Stanbic branches. In exchange, Stanbic promised teachers low interest, unsecured loans.
But Most importantly, Stanbic promised to pay off loans which teachers had with other commercial banks such as Barclays, Standard Chartered, Finance Bank, Indo and other money lenders such as Blue, Bapyport etc.
Thousands of civil servants especially teachers closed their bank accounts in other banks and flocked to Stanbic. The aim of compelling civil servants to close accounts in other banks and open with Stanbic was to ensure that their salaries go through Stanbic. Indeed, Stanbic paid off small loans which civil servants had with competitors.
But like the scammer Stanbic has always been, just when teachers thought they had found a good bank, the South African bank struck.
One teacher explained how he lost K150, 000 to Stanbic through this Ponzi arrangement. The teacher narrated how Stanbic Bank Zambia ripped her off close to K150, 000 using the K50,000 loan she obtained in 2010.
The teacher had an existing loan of about K16, 000 from another financial institution. Stanbic offered to pay off the K16, 000 which the teacher had with another institution. In addition, Stanbic offered the teacher a new loan this time from Stanbic itself. After the agreement, the bank deposited K50, 000 in the account of the teacher, that is, K15, 000 to pay off the existing loan and the K35, 000 as new loan to be repaid in monthly instalments with interest.
” For some reason the bank did not deduct the agreed instalments for about 8 months not because of my fault but theirs. So once that was discovered they started the deductions using higher percentages,” narrated the teacher.
This is a typical trick of Stanbic. They will deliberately stop deducting monthly repayments from a client then letter use that as a weapon against the client. This is the same tricky they used against Savenda.
In September 2016, High Judge Justin Chashi ordered Stanbic to pay Savenda K192.5 million for loss of business and vital contracts after Stanbic bank wrongly and negligently reported Savenda to the Credit Reference Bureau (CRC) for defaulting on instalments.
If your name or the name of your company appears on the Credit Reference Bureau (CRC), it’s almost impossible to get a loan or other financing from banks or other lenders because it is evidence that you are a bad debtor. When you apply for a loan, Banks and other lenders check whether your names appear on the Credit Reference Bureau.
In this case, Savenda obtained a US$540, 000 loan from Stanbic to buy a Printing Machine in 2007. According to records, Savenda was servicing the loan as scheduled, but the bank’s system could not capture these monthly repayments. Stanbic admitted the error and put it in writing that they would rectify the problem. But, the other department of the Bank reported Savenda to the Credit Reference Bureau (CRB) as a deliquescent borrower.
Savenda sued the bank.
The High Court found that the failure to capture the monthly re-payments were the bank’s fault and therefore ordered the bank to compensate Savenda for loss of business.
But the Bank took the case to the Court of Appeal and it ended up in the Supreme court where judges were bribed.
It is the same tricky they used against a Chipata based client who took out a life policy insurance for his mother, father and himself. After deducting money for six years, they stopped. When the client went to file a claim to be paid the insurance money since his father had died, Stanbic refused saying there was an error on their system.
In the case of the teacher, the bank did not deduct her monthly repayments for eight months. But, during this period, Stanbic reported the teachers’ loan to the Credit Reference Bureau as delinquent Loan, that is, a loan that is not being serviced or repaid. Remember They did the same to Savenda management services.
After reporting the teacher’s loan to the Credit Reference Bureau, the bank now started deducting the monthly repayments but with a higher interest and amount than what was agreed.
According to her calculations she ended up paying the bank more than K150,000 in unknown charges such as insurance and others.
And she is not alone, thousands of teachers were robbed in the same manner.
Many teachers spoken to the Watchdog narrated of similar cases. One teacher borrowed K65, 000 in 2010 after being told to close her existing account with another bank. Her K22, 000 existing loan was paid off by Stanbic, but she ended up paying Stanbic close to K200, 000 by 2017.