The Deputy Director, Consumer Protection Department of the Central Bank of Nigeria, Mrs. Umma Dutse, speaks on the need to protect bank depositors from market abuse with IFEANYI ONUBA
What is the rationale behind the establishment of the Consumer Protection Department by the Central Bank of Nigeria?
One of the major lessons learnt from the 2007 financial crisis which resulted into the near collapse of the banking industry was the lack of consumer and market discipline.
In Nigeria, the indifferent attitudes of financial institutions in addressing consumer complaints and the lack of an effective report mechanism for financial consumers were breeding lack of trust and confidence in the financial system.
So the department was created among other reasons, to regulate the conduct of financial service providers to engender trust and confidence in the financial system, and to compliment the traditional prudential regulation in promoting a safe, sound and stable financial system in Nigeria.
What are the key deliverables of the department?
The immediate deliverables of the department include the development of the consumer protection framework to serve as a policy document to address the issue of financial regulation as it affects the plights of consumers of financial products and services in Nigeria.
The second is the development and implementation of the financial literacy framework. We have already developed the framework and it has been approved by the management and we have since commenced the implementation of the framework.
The third deliverable is the deployment of consumer complaints management system. This is an automated system that is going to ensure a seamless complaints handling process.
Can you highlight the socio-economic benefits of the financially literate citizenry to a country?
Participation of the larger proportion of the society in the formal financial system is crucial to the economic growth of any country. The aim of financial literacy is to empower people with the knowledge to evaluate financial products and service.
This will give them the trust and confidence to participate in the financial system. So in a nutshell, financial literacy engenders trust and confidence in the financial system which leads to greater participation and ultimately economic growth and financial system stability.
What strategies does the CBN intend to deploy to achieve remarkable mileage in the financial literacy drive?
The financial literacy framework articulates a multi-stakeholder approach to the delivery of financial education programmes across the various groups of the Nigerian population.
Accordingly, different programmes are being developed in active collaboration with other stakeholders to reach out to several of these target groups which include the children, the youth, the elderly, the adult, the educated and the non educated.
We are currently working with various stakeholders. In developing intervention measures for the various target groups. We are also collaborating with the Federal Ministry of Education and its relevant agencies to develop a school curriculum for primary and secondary schools. We are planning to have a school mentoring programme for primary and secondary schools in Nigeria.
In the economic sphere, financial inclusion is another new term. What is this all about and what does the CBN intend to achieve with it?
Financial inclusion simply means enhancing access to financial services at affordable costs for the vast majority of disadvantaged and vulnerable low-income groups. It is the availability and accessibility of financial products and services to the entire population without discrimination.
Financial products and services are easily available to the privileged in the society but the privileged are excluded.
According to a survey that was conducted in 2012 by ELFINA, about 39.7 per cent of Nigerian adults are excluded from the formal financial system. This translates to about 34.9 million Nigerians that do not have access to formal financial system.
So, the objective of the financial inclusion strategy is to make sustainable financial products and services available to the majority of Nigerians who currently do not have access to such products. And the ultimate goal is to have improved their economic well-being while contributing to national economic growth and development.
Since the establishment of the department, how many cases have you investigated and how many have been resolved so far?
So far, the department has received and treated over 2,800 complaints from consumers against Deposit Money Banks as at end of first quarter of 2013. We have also been to recover more than N8.6bn in favour of various consumers. This figures that I have just mentioned exclude complaints that have to do with Automated Teller Machine and electronic related complaints and also complaints from other financial institutions like the microfinance institutions. It's just complaints against Deposit Money Banks.
What kind of complaints did you receive?
They are mostly complaints that have to do with excess charges, conversion, frauds and similar complaints.
You said the complaints exclude ATMs and electronic, why?
These are treated by the banking and payments department for now but when the structure is approved, the process would come to consumer protection department.
If you receive a complaint, how long does it take for you to get it resolved?
There are various categories of complaints and the time for resolutions usually depends on the nature and type of the complaints. For example, a customer may complain about the refusal of his bank to issue him a bank statement while another consumer may complain of excess charges over a long period of time.
Certainly, the two would take different resolution timeline. While one may just be a few hours or days, the other one that has to do with excess charges may take a longer time. But our regulation is clear that financial institutions must resolve all complaints within two weeks of receiving such. Any case that cannot be resolved within two weeks must be referred to the central bank in line with the help desk circular that we issued out to banks.
