BoG Study reveals banks’ unfair consumer practices

A BANK of Ghana (BoG) assessment of banks and specialised deposit-taking institutions (SDIs) compliance with its consumer protection regime has revealed unfair banking practices by the institutions.

These include charging customers’ savings accounts for over-the-counter withdrawals below stipulated minimum amounts and signing customers onto e-banking products and services and consequently charge without their explicit consent.

“Changes in terms and conditions of loan agreements were made and implemented without the required period of prior notification of customers. The maximum penalty of 0.25 per cent for early repayment of loans was breached,” the findings by the BoG stated.

It also emerged that prior to pursuing enforcement actions on loan defaulters, the minimum prescribed notice period of 30 days was not given some borrowers.

Why the assessment
The BoG’s current market conduct regulatory regime is underpinned by the Banks and Specialised Deposits-Taking Institutions Act, 2016 (Act 930), the Borrowers and Lenders Act, 2008 (Act 773), and the Credit Reporting Act, 2007 (Act 726), among others.

In 2019, the BoG established a Market Conduct Examinations Office (MCEO) within its Financial Stability Department (FSD), to ensure adequate focus on the conduct of banks and SDIs towards their customers.

This was to complement the prudential supervision of banks and SDIs by the Banking Supervision Department and the Other Financial Institutions Department, the objective of which is to promote the safety and soundness of these institutions.

The maiden on-site conduct examinations were conducted by the MCEO from November 2019 to February 2020. The exercise involved officials of the MCOEO visiting eight selected banks to examine the structures, systems and processes in place to promote consumer protection and the early resolution of customer complaints, and to generally assess compliance with relevant market conduct rules.

Customer Complaints
Again, the MCEO has through its published hotline and other contact details in 2019, received an average of 30 weekly complaints from the public through phone calls, WhatsApp messages, e-mails, and direct walk-ins to the office.

These complaints, the assessment said, had been resolved by the office within 20 days.

Section 3 of Act 930 mandates the Bank of Ghana to, among other things,
regulate and supervise the conduct of banks and SDIs.
-    In pursuance of section 3(2)(d) and section 92(2)(a)(xi) of Act 930, the Bank of Ghana issued the Consumer Recourse Mechanism Guidelines for Financial Service Providers in 2017 to provide customers of institutions licensed by the Bank of Ghana (banks, Savings and Loans Companies, Finance Houses, Rural and Community Banks, Micro Finance Institutions and Forex Bureaus) with access to adequate redress that is fair, efficient, timely, and without cost to the complainant.


COVID 19 extra measures
Following the outbreak of Covid-19, the BoG has implemented a number of measures to help provide economic relief to individuals, households, and businesses, and to increase credit to key sectors of the economy to help with economic recovery.

Some of the interventions include the banks and other stakeholders in the payments system waiving fees on digital platforms ATMs, GhIPSS instant pay and cheque-clearing transactions; and banks and mobile network operators have waived transfer fees on mobile money transactions up to GH¢100.