The Central Bank of Barbados has launched new Market Conduct Guidelines to improve transparency and fairness within the financial services sector. Effective as of last Friday, these guidelines establish minimum standards for how licensed financial institutions should interact with their clients.
Governor Dr. Kevin Greenidge introduced the new regulations on Monday at the Courtney Blackman Grand Salle of the Tom Adams Financial Centre. He emphasized that these guidelines are crucial for maintaining consumer confidence and fostering economic growth.
“The aim is to ensure transparency, fairness, and ethical behavior in financial services, providing a consistent banking experience for all,” Dr. Greenidge stated. “Market conduct refers to the behavior and practices of financial institutions in their interactions with consumers and other stakeholders. These guidelines are necessary to ensure that the financial system remains stable, transparent, and fair for everyone involved.”
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Dr. Greenidge highlighted that these regulations are essential for maintaining consumer confidence. “By issuing these guidelines and having financial institutions adhere to them, we provide a transparent and fair system, boosting consumer confidence in our financial institutions.”
The governor elaborated on the guidelines’ role in ensuring that everyone understands the rules, fees, and rights involved in financial transactions. “Everyone knows the rules, the fees, and their rights. It also addresses accessibility for vulnerable groups and the differently abled, impacting economic growth and making our market more attractive to international institutions.”
Detailing the application of these guidelines, Dr. Greenidge noted that they apply to licensees of the Central Bank, including banks and proprietary companies, covering aspects like openness, fee setting, and information display.
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The guidelines focus on five key areas: bank fees and charges, accessibility, account opening and closing, and complaints. They also provide recommendations for improving communication with customers.
Fees and Charges: Banks and finance companies must seek the Central Bank’s non-objection at least 60 days before implementing new fees or increasing existing ones. Customers must be notified 30 days in advance of any changes. Reducing fees requires no prior notice. Additionally, no charges can be levied for electronic fund transfers or cash management transactions under $10,000 per day. All fees must be clearly displayed at physical locations and online to ensure transparency.
Accessibility: The guidelines mandate that physical bank locations be wheelchair accessible and navigable for the visually impaired. Digital interfaces must accommodate various disabilities. From July 2023, all commercial banks must offer at least one no-fee account and low-fee accounts for vulnerable groups, including pensioners, minors, and students.
Opening Accounts: Financial institutions must comply with Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) laws, using a risk-based approach for new clients. Low-risk individuals and businesses will require less documentation than high-risk ones. Banks and finance companies must provide clear timelines and updates during the account application process, aiming for a decision within three to five business days. Denied applicants have the right to a formal review.
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Account Closures: When closing an account, banks and finance companies must notify customers 30 days in advance, providing reasons and possible preventive actions. Customers can appeal closure decisions, which must comply with AML-CFT laws, including ‘tipping off’ regulations.
Complaints: The guidelines ensure customers have accessible, free avenues to resolve complaints. Banks and finance companies must provide detailed information on the complaint process both at physical locations and online. Complaints must be acknowledged within three to five business days, with a written response detailing the decision and any proposed remedies. Unresolved complaints can be referred to the Central Bank.
These guidelines aim to standardize operations, ensuring a consistent banking experience while enhancing financial inclusion for all Barbadians. Cheryl Greenidge, Senior Director of Bank Supervision, noted that while many institutions already practiced the behaviors included in the guidelines, it was important to codify them for consistency across the financial sector.
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