The Reserve Bank of Malawi is expected to compensate the Finance Bank over wrongful closure following a landmark Supreme Court of Appeal ruling today in Blantyre.

Financial and legal analysts say the compensation could run into billions if not trillions of Kwachas once worked out.

The Supreme Court of Appeal ruled that the Reserve Bank of Malawi (RBM) acted wrongly when it closed Finance Bank of Malawi in 2005.

The court has since ordered the central bank to compensate the institution for profits it lost following the closure.

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In its ruling delivered on 3 February 2026, the Supreme Court said that although RBM had concerns about the bank's operations at the time, closing the bank entirely was excessive, as there were other regulatory measures that could have been used.

Finance Bank was shut down in 2005 under the leadership of then RBM Governor Victor Mbewe, following allegations of irregular foreign exchange transactions and claims that some bank accounts had not met proper "Know Your Customer" (KYC) requirements.

The court noted that while regulators have the authority to discipline banks, such power must be exercised proportionately, and that alternative remedies such as fines, corrective directives, or supervision should have been considered instead of outright closure.

The legal dispute has been ongoing since 2006, making it one of the longest-running banking cases in Malawi's history.

As a result of the ruling, RBM is now required to pay billions of kwacha in compensation to cover profits Finance Bank would have earned had it not been closed.

The judgment is expected to have significant implications for bank regulation, public finances, and the exercise of regulatory powers in Malawi.