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Cape Town - The Land Bank has temporarily halted all legal action against farmers who challenged its interest charges on loans, said Land Bank chief executive officer Phakamani Hadebe.
Between 2006 and October 2009, 101 commercial farmers lodged legal claims against the bank totalling R13.6m for interest costs, Hadebe said on Thursday.
"Thirty four of these claims, amounting to R9m, have already been settled and we also made several settlement offers to farmers who have not yet accepted."
There was an uproar earlier this year over the bank's interest charges which are said to be higher than those of commercial banks.
Hadebe said that in some cases farmers had been charged interest exceeding the amount of the original loan.
These charges were being reviewed where farmers had challenged them. Each case was being looked at individually.
"The claims are due to the fact that in 1999, the bank changed its method of calculating interest from compound interest calculated annually to compound interest calculated monthly," he said.
"Changes to the Land Bank Act in 2002 then allowed for penalty and admin fees on new loans and not on existing loans. This is another legacy factor that caused the current claims against the bank," he said.
- Sapa
