Induplum Rule

On 28 March 2011 the Supreme Court of Appeal handed down the judgment in Nedbank v NCR [2011] ZASCA 35. The court dealt with the provisions of section 103(5) of the NCA and the rule has as its purpose the prevention of extensive recovery by a credit provider from a consumer that is in default.  


The judgment clarified the calculation of the In Duplum rule as follows:  


Maximum amount repayable = Unpaid balance of the principle debt (A) + section 101(1)(b) to (g) fees, interest, charges and costs equal to amount A  


Section 103(5) reads “ Despite any provision of the common law or a credit agreement to the contrary, the amounts contemplated on section 101(1)(b) to (g) that accrue during the time that a consumer is in default under the credit agreement as at the time that the default occurs.”  


It is clear that section 103(5) does not allow a credit provider to charge costs, fees or interest where the consumer makes payment and reduces the maximum allowable amount that may be recovered whilst the consumer is in default. This means that a credit provider may not charge interest, fees, costs and charges until the consumer has completely rectified the default.



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