FDH Bank Fined MK200 Million Over Insurance Dispute

The Competition and Fair Trading Commission (CFTC) has fined FDH Bank MK200 million after finding that the bank treated a customer unfairly in a dispute involving a Keyman insurance policy.

The decision was made during the CFTC Board Meeting held on 8 May 2026.

According to the Commission, a company obtained guarantee and overdraft facilities worth MK150 million from FDH Bank in 2023. The facilities included a Keyman insurance policy, which was meant to protect the business if its founder died.

However, when the facilities were renewed in 2024, the bank allegedly changed some of the terms without properly informing the customer. The CFTC found that the bank removed the Keyman insurance clause and made changes to the insurance policy without clear disclosure.

The Commission also found that FDH Bank deducted MK200,000 from the customer’s account for insurance-related charges but later gave conflicting explanations about the payment.

Centre of controversy: FDH Bank

Problems arose after the company’s founder died in April 2024. The business expected the insurance cover to settle the outstanding loan obligations. However, FDH Bank rejected the claim, saying the insurance policy had not been renewed.

The bank then deducted about MK120 million from the customer’s account, leaving the account overdrawn and attracting additional charges.

After investigating the matter, the CFTC concluded that FDH Bank had engaged in misleading and unconscionable conduct. The Commission said the bank failed to disclose important information and unfairly changed contract terms without the customer’s knowledge.

Apart from the MK200 million fine, FDH Bank has been ordered to refund the MK200,000 deducted for the insurance cover. The bank must also reverse the MK120 million deduction, including any related interest and overdraft charges.

The Commission has given the bank 30 days to report on the steps it has taken to comply with the ruling.

The FDH Bank case was the largest penalty announced by the CFTC during the meeting. Other companies, including Standard Bank Malawi and Nitro Phos Limited, were also fined for various unfair business practices.

CFTC Chief Executive Officer Desmond Kaunda said the decisions demonstrate the Commission’s commitment to protecting consumers and ensuring that businesses operate fairly and transparently.

Desmond Kaunda: CFTC chief Executive Officer.

The ruling sends a strong message to financial institutions and other businesses that consumers have a right to clear information, fair treatment and honest business practices.