The Malawi Government has declared it will aggressively fight a staggering compensation claim reportedly estimated at nearly K1 trillion in the long-running legal battle involving Finance Bank Malawi Limited and Reserve Bank of Malawi, warning that it will not allow public funds to be surrendered without a brutal legal contest.
Attorney General Frank Mbeta said government lawyers and financial experts are currently tearing through the figures submitted by Finance Bank as authorities prepare a strong counterattack ahead of the court's assessment of damages.
Speaking after the matter was adjourned yesterday, Mbeta described the claim as excessively huge and insisted government was determined to challenge every aspect of it.
"We are still on a journey because the experts are doing our counter response. They actually need a bit more time to finish. It is a very big claim, so they need a bit more time," said Mbeta.
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He made it clear that government does not accept the amount being demanded and would fiercely resist any attempt to push through what it considers inflated compensation.
"We will look at what they are looking for so that we can seriously challenge those figures. We don't believe that it is payable that way. It is way too much," he said.
The matter has since been adjourned to June 15, 2026, before the court proceeds with assessment of damages.
At the centre of the explosive dispute is a February 2026 ruling by the Supreme Court of Appeal of Malawi, which found that RBM and government acted unlawfully when they suspended Finance Bank's foreign currency operations and revoked its banking licence in 2005 without granting the bank a fair hearing.
The ruling overturned an earlier High Court judgement that had favoured RBM and opened the door for Finance Bank's massive counterclaim for damages.
Finance Bank lawyer Wapona Kita previously argued that the compensation covers business losses and profits the bank allegedly lost from 2005 to date following its closure.
Finance Bank was shut down in 2005 after RBM accused it of engaging in irregular foreign exchange transactions and failing to comply with "Know Your Customer" regulations.
But now, more than two decades later, the legal battle has escalated into what could become one of the most financially consequential court fights in Malawi's history, with taxpayers potentially exposed to a claim running into nearly a trillion kwacha.
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Government's latest stance signals that authorities are preparing for an all-out courtroom battle to block or drastically reduce the payout.
