Abstract
LL.M. (Commercial Law)
The clients of the banks in Lesotho are not aware or have little knowledge of the dispute-resolution mechanism that they need to follow when they have a complaint with their banks. This is due to the fact that the Code of Banking Practice in Lesotho is not brought to the attention of the bank’s clients. It is also due to the fact that there are currently no laws aimed at protecting the consumers in Lesotho, so, therefore, consumers when they have a complaint or a dispute with the service providers, resort to litigation which is costly and time consuming.
This study is aimed at looking at the way the banking industry in South Africa resolves the disputes between the banks and their clients, and to compare the legal framework of South African dispute-resolution mechanisms to that of Lesotho, which in my view is not effective and efficient.
In Lesotho there is no ombudsman for banking services. The Code of Banking Practice in Lesotho simply provides that the client can take its complaints to the Central Bank of Lesotho which currently regulates and supervises the financial institutions in Lesotho.
The study investigates the reasons why the Ombudsman for Banking Services was created in South Africa, and considers the advantages and disadvantages of having an independent body to resolve the disputes between a bank and its clients.
The purpose of the study is to discover the importance of dispute resolution in the banking industry and also to learn how other jurisdictions conduct their dispute resolution in the banking industry and to make recommendation for developing countries like Lesotho which still lag in this regard.