Complaints, microfinance guidelines for banks

The Reserve Bank of Fiji has today issued new policy guidelines for commercial banks, requiring them to set up proper complaints procedures for customers and establish microfinance units.

The RBF has also directed foreign-owned banks operating in Fiji to set up local advisory boards, whose members must meet RBF criteria.

Effective January 1, 2010, the guidelines are targeted at promoting broad based economic development and greater financial inclusion, said RBF Governor Sada Reddy.

“This includes extension of financial services to the informal sector of the economy and ensuring that commercial banks undertake development activities suitable to the needs of people in Fiji,” says Reddy.

He said the microfinance guideline requires commercial banks to “extend sustainable banking services to Fiji’s marginalised, poor communities and individuals as well as small and micro enterprises”.

Commercial banks will be required to establish internal microfinance divisions and units in existing branches. Towns and cities in which banks have more than one branch will have to establish a single microfinance unit in any one branch, complemented by a microfinance division at the particular town or city’s main branch.

The guideline on Local Advisory Board aims to help banks better understand and align their strategies to Fiji’s regulatory and supervisory environment as well as national development objectives, including those on the provision of financial services to the wider community, said Reddy.

He said the guideline requires Local Advisory Board members to have sufficient knowledge and understanding of Fiji’s business and socio-economic environment and the banking industry, as well as an awareness of the long term growth strategies of the government. Board members must meet RBF requirements.

The Complaints Management guideline requires boards of commercial banks and licensed credit institutions to approve a policy framework for complaints management, clearly defining the
responsibilities for senior management and complaints handling staff.

Reddy says it is imperative that clear delegation of authority for complaints handling is established and that designated staff are adequately trained.

All bank branches must keep complaints registers while a master register will have to be kept at the head office.

Banks and credit institutions have been encouraged to undertake public awareness campaigns on their complaints management framework.