The Land Bank has been ordered to repay five farmers R3.6-million for interest it overcharged them on loans, the Business Times reported on Sunday.
It would also have to pay the farmers 15.5 percent interest per year, the High Court in Pretoria ruled on Friday.
Judge Prinsloo found the bank had charged them compound, instead of simple interest, on their agricultural loan accounts.
"There could still be hundreds of farmers that feel aggrieved about the way their interest calculations were conducted by the Land Bank," the attorney representing the farmers, Schalk Botha, was quoted as saying.
Land Bank CEO Phakamani Hadebe, who had not read the judgment yet, said: "This all comes down to the Land Bank moving to a new accounting software system in July 1999. At that time the Land Bank also made a decision to start charging compound interest instead of simple interest, in line with what other banks were doing.
"The problem was that some of the farmers who had signed contracts involving simple interest before July 1999 ended up being charged compound interest. It is only farmers who signed for loans before that point who have been affected... ."