Sri Lanka's Central Bank recently put forward a "Customer Charter of Licensed Banks" in which it outlined a 'code of conduct' for licensed banks, as well as the customers of these financial institutions, with the aim of providing "key standards for fair banking practices."
One set of guidelines in the charter, amongst the many indicated, pertained to a licensed bank's "Terms and Conditions" and the understanding of such, stating that "an officer carrying out the duties of a relationship officer should clearly explain to the customer of the terms and conditions and features of the products/services, provide a comparison of alternative products/services available and give reasonable time for the customer to make a decision." Additionally, this process also requires that customers revert back with a "written confirmation [that] the details of the products or services and their terms and conditions were received, explained and understood."
Also these guidelines required that "all the documents pertaining to the product or service are duly completed and signed by the customer (Incomplete documents and obtaining signatures on blank papers/documents are avoided)" and that "any changes made by licenced banks to the agreed terms and conditions on products or services should be informed to the customers in writing or through paper notice or any other appropriate way before such changes are made."
The charter also signalled that customers are entitled to know "details of the bank’s general charges such as interest rates, fees and commissions, if any, required to be paid by the customer including the method of computing interest charges."
Also, the "course of recovery actions a bank may follow in the event of any default by the customer on his/her obligations and bank’s expenses that will be reimbursed from the customer."
Also noted, customers should be informed of the "disclosure of customer information to a party legally authorised to obtain such information" as well as the rules pertaining to "(i) reporting of suspicious transactions and above-the-threshold transaction to the Financial Intelligence Unit, (ii) the reporting procedures that the customer should follow in the case of stolen cards /financial instruments and (iii) liability of the bank and the customer" and even the "procedures to be employed by the bank to foreclose on the property held as collateral for a loan and the consequences thereof to the customer and options available to him/her."
These new rules also stipulated that a "periodic statement should be sent to customers either in printed form or electronic form opted by them regarding transactions and balances in their deposit or loan accounts or other services other than passbook savings accounts of non-dormant category."
Also that "[statements] for credit cards should set out the minimum payment required and the total interest amount charged if only the required minimum payment is made and late payment fee if the minimum payment is not made."
In addition, guidelines also indicated that "customers have the right to know the details of the agents appointed for customer services by licenced banks and the ‘Code of Conduct’ issued to them by banks to refrain from... a) Harassing customers, b) Using abusive debt collection practices, c) Disclosing customer information to others, d) Giving false or misleading information about products/services, e) Unduly influence customers or the general public to buy or get involved in the bank’s products/services, f) Engage in getting any security documents signed outside the bank."
On the other hand, it is the responsibility of a banks's customers to "not borrow beyond their affordable repayment capacity limit" as well as be timely and honest in updating the bank with their contact details and/or changes to status, fianncial or otherwise.
They are also required to contact the bank immediately should they be unable to pay any loan installments, etc or should they become of any fraud in relation to thier accounts, Personal Identification Number (PIN), etc.
Meanwhile, the charter makes it the responisibility of licenced banks to educate customers with regards to financial literacy as well as give them information about the Financial Ombudsman, the Credit Counselling Centre, etc.
It also states that banks must now receive complaints either verbally or in writing, and have to revert with written confirmation of the complaint being received as well as periodically updating customers about the status of the complaint.