The National Bank of Ethiopia (NBE) successfully facilitated a workshop with multiple commercial banks on February 15, 2024, with the aim of reviewing the effectiveness of the Financial Consumer Protection Directive and its complaint handling procedures. This collaborative session was hosted at the NBE’s headquarters.
W/ro Martha Hailmariam, Advisor to the Vice Governor for Financial Institutions Supervision, opened the workshop. She highlighted the NBE’s commitment to consumer financial protection as a cornerstone for ensuring the stability, inclusiveness, and integrity of the financial sector. She noted that this commitment is integral to the NBE’s strategic framework.
She also touched upon the rise in customer complaints, which has brought customer service to the forefront of the NBE’s regulatory focus. In response to this challenge, the NBE has proactively established the ‘Financial Consumer Protection and Education Directorate.’
Ato Muhdin Shifa, the Acting Director of Financial Consumer Protection and Education, further detailed that the meeting was convened to demonstrate the NBE’s dedicated efforts in consumer protection and to deliberate on the insights from recent onsite examinations.
Ato Muhdin echoed the directive from the Governor of the NBE, H.E. Mamo Mihretu, urging all banks to have their complaint handling units operational by December 31, 2023. He mentioned that subsequent onsite checks were performed to gauge adherence to the directive, with the results communicated to the banks for any necessary improvements.
Ato Muhdin Shifa then presented the principal observations from the NBE’s financial consumer protection audits.
Bank representatives suggested that the Financial Consumer Protection Directive could benefit from revisions for greater clarity in certain areas, like defining the range of financial consumers it applies to. They also indicated a preference for a stronger focus on savings account policies rather than credit services.
The acting director reassured that the directive is based on international norms and encompasses all financial products and entities regulated by the NBE. He acknowledged the ongoing process to refine the directive to align with evolving market conditions, while maintaining the enforcement of its core provisions.
In closing, Ato Muhdin stressed the importance for commercial banks to fortify their complaint handling mechanisms in compliance with the Consumer Protection Directive. The workshop, which spanned half a day, saw the active participation of over 30 representatives from a variety of commercial banks.
