Dear Editor,

On what prudent basis would any commercial bank stop lending money?

Well, a non-compliant commercial bank refused to lend me my own money in late 1996. This was a clear signal to me to close the account and bolt with my money.

I used the term non-compliant to refer to this institution at that specific time because it was, to my understanding, breaching one of the fundamental principles of banking: lending money at a profitable interest rate.

At the time I was in a financial jam. I had a long-term investment in a financial institution owned by this commercial bank. But I didn’t wish to incur a penalty and also lose the higher interest I would possibly earn by withdrawing funds early. Hence, I calculated and opted to use a third of the investment for a cash-secured loan. I obtained all the relevant documents from this commercial bank’s affiliate institution and presented them, but my request for a cash-secured loan was rejected. The request was legal and standard banking practice. But the bank was simply not lending any money during that period.

I sensed trouble. I decided to close the long-term investment. It felt like hell trying to do so. It was also an arduous task to cash the cheque at the commercial bank. Luckily a colleague learnt of my ordeal and froze some funds in her account which facilitated my accessing emergency money.

I deeply analysed my ordeal. It seemed clear what was emerging — turbulence. A prominent bank, closed months earlier, did not even last a quarter century. I figured this commercial bank would collapse. And it did.

The reasons it failed probably differed from my analysis. Many institutions were casualties of the financial sector meltdown in the 90s, which resulted in huge losses to thousands of depositors and shareholders and the horror stories were many.

I shared my story not to give any financial advice, which I am not qualified in any way to do and legally should not. But we share experiences to learn from each other.

Deception, fraud, financial irregularities, and unauthorised transactions undeniably occur in financial institutions. Whatever we don’t keep track of we will lose track of, especially our money.

Daive R Facey

DR.Facey@gmail.com