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15 Nov 2022
BY Felix Cuicredidi AND Valence Rukesha

Rwanda tightens its hold on the protection of financial service consumers

The National Bank of Rwanda (“BNR”) has published Regulation n° 55/2022 of 27/10/2022  to financial service consumer protection to implement the Law no 017/2021 of 03/03/2021 relating to financial service consumer protection. This regulation, came into effect on 7 November 2022 applies to financial service providers (“FSPs”) and their representatives who offer the following products and services:

  • deposits and savings:
  • loans and credit reporting;
  • insurance, pension;
  • payment services;
  • financial leasing;
  • foreign exchange; and
  • any other activity approved by the BNR.

In general, the new regulation aims to achieve the following:

  • expand the BNR's oversight authority;
  • address fraud on customer accounts;
  • provide for increased transparency in the rendering of financial services;
  • provide guidance on complainant handling practices and consumer empowerment within the sector;
  • shed more light on key features of on financial service model contract;
  • regulate the pricing issues and charges within the sector such as penalties and unfair charges; and
  • monitor the advertising of financial services and products as well as handling of consumer personal information.

The regulation requires the board of financial service providers to include specific and well-defined consumer protection responsibilities in its charter and have one of their board committee assume consumer protection responsibilities. The board may also establish a separate committee for such purposes depending on the nature or complexity of its business. FSPs are also required to establish the responsibilities connected to financial service consumer protection across all management levels of the business.

In terms of the strategic planning and policy formulation of financial service providers, enough consideration of consumer protection should be made in the long and short-term strategic plans, annual business plan and budgets.  These plans should address:

  • the principles of financial service consumer protection such as transparency;
  • fair treatment of consumers, protection of consumers’ assets and data;
  • consumer empowerment; and
  • consumer education.

Financial service providers are now required by the regulation to conduct consumer satisfaction surveys every three months to assess the level of consumer satisfaction with each of their products and services, and to retain records for scrutiny by the regulatory authority.

FSPs are also compelled by the regulation to display all information necessary for a financial product or service on their websites, office entrances, places of business, and through pamphlets available to the general public free of charge. All costs, tariffs, fees, and charges relevant to the product or service in question must be disclosed to the public.

This disclosure includes posting data on tariffs and fees to the comparator system operated by the BNR so that consumers of financial services can make informed choices by comparing financial products offered by various financial service providers. Insurance and pension fund operations are subject to additional disclosure requirements under the regulation.

The regulation protects consumers from being subjected to unfair or ambiguous terms when purchasing a financial product or service. A provision that is regarded unfair will be null and void, and a provision that is deemed vague will be interpreted in a manner most favourable to the consumer of the financial service. The need that contracts and information for consumers be presented in a language that is understood by the consumer is a welcome addition. The FSPs duties of confidentiality, care, skill and diligence have been cemented in as much detailed way as possible to emphasise their importance.

The regulation also protects consumers from:

  • over-indebtedness;
  • unfair pricing;
  • fraud;
  • harassment;
  • corruption (by requiring financial service providers to have detailed anti-corruption policies); and
  • other unfair practices that may have a negative impact on financial service consumers.

Lastly, to guarantee the seamless implementation of its requirements, the regulation authorises the regulatory body to impose administrative sanctions on any non-compliant financial service provider, based on the degree of the misconduct.

Reviewed by Eustache Ngoga, an Executive at ENSafrica | Rwanda

Valence Rukesha

Senior Associate

Felix Cuicredidi

Trainee Associate

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