Our investigation

We cannot investigate a bank’s lending decisions because they are generally a matter of commercial judgment. It is up to banks to decide the level of risk they are prepared to accept in lending money to someone, and it is not our role to become involved in such decisions. A bank can impose whatever conditions it considers necessary when it offers to lend money – provided those conditions do not breach any duty or obligation owed to a customer.

When Manawa originally applied for the interest-only arrangement, she told the bank her mother's property would soon be sold and she intended to use her share of the proceeds to repay the loan on her property. We found the conditions the bank wanted to impose were relevant to its lending decision and were not arbitrary or in breach of any duty or obligation it owed to Manawa. The bank did not owe Manawa a duty to ensure its offer, and any attached conditions, were in her best interests. The bank had previously offered Manawa $1,000 in recognition of problems and delays in considering her complaint, and we encouraged her to accept this offer.

Outcome

Manawa did not agree with our views on her complaint.  We issued a decision, upholding some aspects of Manawa’s complaint but did not uphold her complaint about the conditions on which the bank would provide an interest-only arrangement.  Manawa did not accept the bank’s offer.