Johannesburg — FIRST National Bank (FNB) closed its Million A Month account competition on Friday after the Supreme Court of Appeal upheld a h igh c ourt ruling that barred the bank from running the competition on the grounds that it contravened the National Lotteries Act.

The court's decision sets a precedent that could result in similar competitions being banned.

FNB launched the competition in 2005 to shore up savings in SA, which is notorious for being one of the countries with the lowest savings rate in the world. The competition, which rewarded customers for saving , paid out R75m and produced 36 millionaires since it was launched. It also paid out R5,4m worth of eBucks, as part of FNB's rewards programme.

FNB CEO for Savings and Investment products Robert Keip assured all Million A Month depositors their savings were guaranteed and would be available to customers at short notice.

FNB lodged an application in April last year for leave to appeal a h igh c ourt ruling in December 2006 that outlawed its competition.

The Pretoria High Court ruled in favour of the National Lotteries Board, which argued that the account contravened Section 57 (1) of the National Lotteries Act, as prizes were distributed by lot or chance.

FNB countered this, saying that the account holder did not pay for the right to compete and thus lost nothing.

It argued that the account holder was in precisely the same financial position as any other client who deposited funds into a savings account.

Despite the ruling by the Pretoria High Court, FNB believed the competition did not contravene the National Lotteries Act. The bank said other countries such as the UK, Brazil and Spain ran similar products , as it was a good concept for bringing those without bank accounts into the formal banking system.

"In fact our product had brought billions of rands out of pillows into the formal banking system," FNB CEO Michael Jordaan said at the time.

In addition, he said, Harvard University had approached the bank wanting to do a case study on the effect of the Million A Month account on developing a banking culture among those who did not have bank accounts.

Keip said on Friday that the loss of the court battle did not put a stop to FNB's efforts to entrench a culture of savings in SA.

"If anything, today's court decision challenges us to look for more innovative ways to help people save their money," said Keip.

The Million A Month account was a 32-day notice investment product with a minimum opening balance of R100.

The account earned interest, but the key was the monthly competition element, whereby account holders stood to win more than R1m each month.

For every R100 in their account, the account holder acquired one entry into the monthly draw.

The bank said because of the popularity of the product, FNB had been signing on about 30000 new Million A Month account holders every month.