annex 1: smart campaign role vis-à-vis prudential …… · web view7/28/2014 · building off...

Evolution of Client Protection Standards The Client Protection Standards were created to operationalize where the microfinance industry sets the bar in terms of the minimum behaviors clients should expect from institutions with which they do business. Building off of the seven Client Protection Principles (CPPs), the Client Protection Standards specify what ‘doing no harm,’ must entail in practice.

The client protection standards represent the output of several years of industry collaboration and input, managed by the Smart Campaign. For the standards released in January 2013 as part of the Client Protection Certification Program, the Smart Campaign worked with a Task Force of over 30 experts representing various stakeholders to develop and vet the standards. The standards are truly a public good for and by the industry.

Standards that reflect social norms and expectations of an evolving industry must be dynamic. In order to incorporate an ever-changing sector and its diversity of products, services and related client protection risks, the Smart Campaign has begun work to evolve and improve its standards. One of the areas flagged as requiring more attention and specificity was savings.

The Smart Campaign and its Evolution of Standards Working Group has contracted Dave Grace and Associates to make an initial set of recommendations for improving the Client Protection Standards based on their application to clients using microsavings. This initial set of recommendations is included in this document and will go through a period of open comment, beta-testing and expert review over the remainder of 2014. The recommendations are predominantly at the indicator and guidelines level.

After this period of review the Smart Campaign will determine which of the recommendations would be appropriate to include in its standards, which are currently scheduled to be re-released in Q1 2015. After the release of the final recommendations, institutions interested in certification would not be held against these for at least six months in order to make time for adjustment and alignment. We welcome your comments and thoughts on these recommendations and thank you for your participation. New material is shaded in blue for clarity. Proposed deletions are shaded in red and have a justification in a column for comments. Proposed modifications to existing technical content are shaded in purple .

Annex 2 of this document contains the current standards and indicators as well as guidelines that specifically apply to savings for your reference when reviewing the current recommendations.

Proposed New Standards, Indicators, and Guidelines for Microsavings 1

http://smartcampaign.org/certification/certification-standards

Table 2A. Recommended Modifications to Existing Standards Existing Principle Proposed Revision ExplanationPrinciple 3: Transparency Standard 3.1.5: If credit life and/or

compulsory savings are mandatory they are taken into account in the effective interest rate.

Given that savings are fully accessible to the client the only “cost” is if the savings account is paying a below market interest rate. The more potentially abusive practice is the requirement to purchase additional at risk capital shares in an institution as part of a loan, especially if that institution is insolvent or those shares have significant withdrawal conditions that seems unlikely to be easily satisfied.

Principle 5: Fair Treatment Current Standard 5.4.6: The loan officer base pay is at least a living wage.

Recommended Modification:Adequate Standard 5.4.6: All staff have a base pay that is at least a living wage.

Principle 6: Privacy of Client Data Current Standard 6.1.4: The FI has penalties for exposing or revealing client data to third parties without prior client consent.

Recommended Modification: Standard 6.1.4: The FI has penalties for exposing or revealing client data to third parties, including family that is not on the account, without prior client consent.


Table 2B: Recommended New Indicators for Existing Standards Existing Principle Existing Standard Proposed IndicatorsPrinciple 1: Appropriate Product Design and Delivery Channels

1.1: The FI designs products that are appropriate to client needs and do no harm

[Savings]Does the FI have a license and/or statutory authority to capture savings?ORDoes the FI have deposit insurance?Is the FI insolvent but still accepting savings?Is the FI prudentially supervised?ORWhat is the FI’s capital to total assets ratio?What is the FI’s liquid asset to total deposits ratio?SEE ANNEX 1 for more information on these options.

Principle 3: Transparency 3.1 The FI fully discloses cost and non-cost information

[Savings] The FI clearly disclose wait times, conditions and penalties for accessing current accounts, term deposits and equity shares.

3.2: The FI communicates proactively with clients in a way that clients can easily understand

[savings] The FI accepts alternative forms of ID to open savings accounts.

Principle 4: Responsible Pricing 4.3: The FI does not charge excessive fees

[savings] FI has interest rates and fees in line with peers.

Principle 5: Fair Treatment 5.5: In selection and treatment of clients, the FI does not discriminate inappropriately against certain categories of clients

[savings] Rates are non-discriminatory and are offered to all clients with the same type product or financial profile.

Principle 6: Privacy of Client Data 6.2: The FI informs clients about when and how their data is shared and gets their consent

[savings] The FI has a policy in place to identify beneficiaries from account holders regarding how funds should be distributed upon an accountholder’s death.


Table 2C: Recommended Guidelines to Existing Indicators

Existing Principle Existing Standard Existing Indicator Suggested Guideline:Principle 3: Transparency

3.5 The FI provides accurate and timely account information

3.5.2: [group lending] Each client receives a contract, and/or an individual pass/book or payment book with contact terms and signature (even if the contract is between the group and the financial institution).

[Group Savings] Each member in the group receives notification of the total balance of the group’s account and their own share of ownership of the total balance.

Principle 5: Fair and Respectful Treatment of Clients

5.4: The FI implements policies to promote ethics and prevent fraud

5.4.4 There is sufficient monitoring of the practices (by operations department, internal audits), to provide education or sanctions as necessary.

[savings]- Daily cash counts & dual control verification.- Vault cash counts.- Minimum amount of cash on site for withdrawals. Kept in dual control vault.- Audit trail on all deposits/withdraws.- Periodic balance verifications.- Internal/external audits of cash handling


Annex 1: Smart Campaign Role Vis-à-vis Prudential Supervision

We are trying to understand the role of the Smart Campaign vis-à-vis prudential supervision. We are trying to find a path forward on this issue and would like your input on three potential solutions we've identified (or a 4th option that you may have).

Option 1 - Only certify financial institutions that are prudentially supervised by a financial sector authority in the country/region.Pro: Puts onus on national authorities, not Smart certifcation, to safe guard savings.Con: Some data from AFI suggests that less than half of all deposit taking MFIs are prudentially supervised and only 26% of financial coops and its rarely up to MFI/Coops if they are supervised or not. This could significant limit the potential market for certification.

Option 2 - Only certify financial institutions that are prudentially supervised and which have deposit insurance.Pro: Puts onus on national authorities, not Smart certification, and provides depositor protections in the case of failure.Con: An even smaller universe of MFIs/Coops have deposit insurance and the potential market for certification is smaller.

Option 3 - Certify any financial institution regardless of its supervision or deposit insurance status as long as it meets minimum tier 1 and tier 2 capital to total asset (e.g., 10%) and liquid assets/total deposit (e.g., 15%) thresholds. Pro: Allows for the broadest universe of institutions to become certified while setting fairly rigorous thresholds for solvency and liquidity.Con: These are point-in-time measures that can change. Will current and future assessors have the ability to sufficiently look at these items? It blends market conduct and prudential oversight and may implicitly give certification a meaning that we may not be able to support.

Option 4 - ???


http://www.afi-global.org/blog/2013/11/25/should-nbfis-be-part-financial-inclusion-agenda

Annex 2: Current Standards, Indicators and Product-Specific Guidance on Savings

1 - - Client Protection Principle 1: Appropriate Product Design and Delivery Channels

Existing Guidelines for Savings

1 1 - The FI designs products that are appropriate to client needs and do no harm1 1 1 The FI designs products that are appropriate to client needs and do no harm. It does not offer

products that produce negative value for the clients.[savings]* Does not have high fees that deplete the savings.

1 1 2 The FI has a policy describing acceptable pledges of collateral; Has clear guidelines for how collateral is registered and valued.

1 2 - The FI seeks client feedback for product design and delivery1 2 1 The FI investigates reasons for clients drop out.

1 2 2 The FI uses client feedback to inform product development and improve existing products (client feedback can be informal).

1 3 - The FI does not use aggressive sales techniques1 3 1 The FI does not use high pressure/ aggressive sales techniques. Does not force clients to sign

contracts (for credit, no forced signing of any individual borrower or group member, or any guarantor).

* Staff are regularly reminded of clients' rights to refuse a loan/insurance/savings product.

2 - - Client Protection Principle 2: Prevention of Over-indebtedness2 1 - The FI conducts appropriate client repayment capacity analysis before disbursing a

loan


2 1 1 The FI policies support good repayment capacity analysis. The loan approval does not rely solely on guarantees (whether peer guarantees, co-signers or collateral) as a substitute for good capacity analysis. [individual lending] Repayment capacity analysis is done for every loan. [group lending] The group formation and loan approval process ensure the prudent self-selection of members, with emphasis on the concept of solidarity payment.

2 1 2 The FI's repayment capacity policy is adequately disseminated among staff, considering the staff growth and turn-over.

2 1 3 The FI's repayment capacity policy is uniformly used in the practice.

2 1 4 The FI performs a repayment capacity analysis at each loan cycle, even if simplified for secondary aspects at loan renewal.

2 1 5 For clients with informal revenues and/or non consumption loans (most cases), the repayment capacity analysis is based on a client visit (performed by the loan officer or delegated to the group/village members). The FI verifies the information consistency through cross-checks. For clients with a salary asking for a consumption loan, a client visit is not required.

2 2 - The FI incentivizes quality loans2 2 1 Regular reports on PAR and write-offs are produced and reviewed by the FI's management.


2 2 2 Reasonable portfolio quality is maintained over time. If there is poor long term quality of loan portfolio, and linked to over-indebtedness, corrective measures have been put in place.

2 2 3 The FI's productivity targets and incentive systems value portfolio quality at least as highly as other factors, such as disbursement or client growth.

2 2 4 The FI's productivity targets and incentive schemes are reasonable as compared to the industry benchmark (parameters and proportion of fixed/variable remuneration).

2 2 5 If PAR is over 10% at the level of the MFI, bonuses are offered to loan officers able to decrease PAR below 10%.

2 3 - The FI uses credit bureau and competitor data, as feasible in local context2 3 1 [credit bureau] The FI policies include clear consultation and sharing of client data (for all

loan cycles).

2 3 2 [credit bureau] The FI systematically reviews client data from the credit bureau (for borrower current debt levels and repayment history) to assess the client repayment capacity prior to disbursement at each loan cycle. The FI also systematically reports client data to the credit bureau.

2 3 3 [credit bureau] [group lending] Groups access to up-to-date data from the credit bureau regarding borrower credit history: group members are provided with the credit bureau credit checks done on other members.

2 3 4 [no credit bureau] Policies include clear consultation and sharing of client data (for all loan cycles), with competitors, as feasible in local context.


2 3 5 [no credit bureau] The FI regularly consults with and reports client data to competitors (informal data exchanges consistent with legal limitations), as feasible in local context.

2 3 6 The FI has a supervisory system in place to ensure that the credit bureau or competitor data is effectively used to inform credit analysis and decisions.

2 4 - The FI Management and Board is aware of and concerned about the risk of over-indebtedness

2 4 1 The FI's management and Board of Directors show awareness and concern about the risk of client over-indebtedness, and monitor it.

Examples of showing awareness:

* having a definition of over-indebtedness in its context;

* discussing over-indebtedness during Board Meetings (verified by looking at Board minutes);

* monitoring clients who repay early in order to get a new loan;

Examples of how to monitor over-indebtedness:

* monitoring portfolio quality and its trends

* monitoring performance by product

* monitoring multiple lending in the FI’s database

* cross-checking multiple lending


within a same household, etc..

The FI could have a set of indicators that are considered red flags for over-indebtedness, like a growing PAR on a specific product or branch, increased calls of guarantees, increased client exits due to repayment difficulties, decreased savings.

2 4 2 In high risk markets, stronger efforts are required. Management and Board of Directors define what is high-risk. They review relevant market level information (relevant to the current or planned operational area of the financial institution).

2 5 - The FI's internal audit department monitors that policies to prevent over-indebtedness are applied

2 5 1 The FI's internal audit and/or internal controls department verifies the compliance with the policies and systems to prevent the risk of client over-indebtedness.

2 5 2 The FI's internal audit and/or other departments (except for credit and/or collections departments) visit a representative sample of clients each year.

2 5 3 The FI's MIS regularly provides information on rescheduled loans.

2 6 - The FI avoids dangerous commercial practices (i.e., avoids combining loan products to meet the same need, or restricting the loan use; sets prudent limits to allow for the renewal of a loan in case of early repayment; sets guidelines for appropriate rescheduling policies)

2 6 1 [group lending] The FI has a policy that avoids parallel loans within the MFI (i.e., combining loan products to meet the same need, or restricting the loan use).


2 6 2 [group lending] The FI has prudent limits to allow for the renewal of a loan in case of early repayment.

2 6 3 The FI has specific procedures to actively work out solutions (i.e., through workout plan) for rescheduling loans/ refinancing/ writing off on an exceptional basis for late clients who have the “willingness” to repay but not capacity to repay, prior to seizing assets.

3 - - Client Protection Principle 3: Transparency3 1 - The FI fully discloses cost and non-cost information3 1 1 The FI fully discloses to the clients all prices, installments, terms and conditions of all financial

products, including all charges and fees, associated prices, penalties, linked products, 3rd party fees, and whether those can change over time.

[savings]* Savings documentation lists eligibility criteria, interest rates, withdrawal limits, minimum and maximum balances and use of savings in case of credit default (if applicable).* All fees should be disclosed, including for account opening and closing, account maintenance, balance inquiries, withdrawals, payments, transfers, use of ATMs and use of mobile phones for payment transactions. If fees vary depending on account balances and/or usage (for example, if certain services are free if balances are above a certain minimum), this should also be made clear.* Any minimum balance requirements and consequences (higher fees, ability to earn interest, account closure, etc.) if balances fall below the minimum.* Interest rate information must include the percentage interest rate; how it is calculated (on the basis of the original deposit or compounded for


interest accruals) and how often; the annual percentage yield; whether the interest rate can be changed and, if so, how often.* The account closing procedure, including any additional fees and the time required to liquidate final account balances, should be made clear.* Savings documentation shows total annual cost for maintaining each type of savings account

DEFINITIONSLinked products: any products that automatically come with the loan, such as credit life insurance premium, compulsory savings. If a compulsory savings is required to access a loan, this is considered a linked product and the terms and conditions must be specified in the contract (interest rate, accessibility of savings, whether the savings can be used in case of default).

Compulsory savings: regular savings deposits required over the course of the loan. If there is a compulsory savings requirement, the client should be advised about the terms of his or her access to the account, including whether and how the lender can use the savings account to pay off unpaid loan installments. It should also be clear whether there are different terms for compulsory savings and voluntary savings that are held in one account, such as different pricing and terms of access. Savers should be able to


determine what are the levels of compulsory and voluntary savings in his or her account.

Changes to product terms and conditions: If product terms like interest rates are subject to change, clients should be informed of possible changes, under what circumstances, how much notice will be given, and how the notice will be provided, and if and how clients can agree to these changes. For example, loans with variable interest rates or indexed loans.

3 1 2 The FI clearly presents to clients the total amount that the client pays for the product, regardless of local regulations (including in the absence of industry-wide requirements).

[credit]* At the minimum, FIs should present the total cost of the product for the product term, so that it is possible to compare product amounts. Total cost of credit includes total interest charges for the loan period; total payments associated with fees, commissions, penalties, and mandatory credit life insurance if applicable; total payments of compulsory savings/cash deposit/loan guarantee fund and any interest earned thereon. Total cost is expressed as an absolute value, not expressed as an annualized percentage.

3 1 3 The FI participates in the MFTransparency project (or similar industry project, if applicable).

3 2 - The FI communicates proactively with clients in a way that clients can easily understand


3 2 1 The FI has effective communication. Staff communicates in such a manner that clients can understand the terms of the contract, their rights and obligations. Staff communicates with techniques that address literacy limitations (e.g., materials available in local languages).

3 2 2 The FI contracts contain simple language and no fine print (figuratively or literally). A clear facts summary page is given if the legally necessary contract is deemed too technical for the clients.

* Savings products: product term, start date, interest rates, fees, withdrawal limits, minimum and maximum balances, penalties.

3 2 3 The FI avoids using pricing mechanisms that create confusion on the total costs. Mechanisms that create confusion include:* Calculating interest using a flat method, and not disclosing APR/EIR, which makes it difficult for clients to compare loan products of varying terms;* Requiring more than 10% in cash collateral to access the loan (10% of cash collateral corresponds to a Transparency Index of 80%--i.e., clients can clearly see where 80% of the total interest goes, while the other 20% is buried in undisclosed costs). Cash collateral refers to savings required to deposit upfront in order to access a loan. Usually expressed as a percentage of the loan. May be associated with compulsory savings, i.e., deposits throughout the loan cycle. Other terms used: financial guarantee, security deposit.* Up-front fees representing more than 2.5% of the principle (which corresponds to a Transparency Index of 80%).


* Deducting the first payment from the principles, without clearly communicating this to clients (i.e. there is a difference between the loan amout as per the contract and the amount of money given to the client).* Variable rate loans, such as indexed loans, the FI must demonstrate that they clearly explain pricing and cost scenarios to the clients, including a pessimistic scenario (e.g., in the case of indexed loans). They must also demonstrate that product was developed after careful study of client needs.

3 3 - The FI uses a variety of disclosure mechanisms3 3 1 The FI uses at least two different communication channels for disclosing clear and accurate

information about the product: written and verbal (to address literacy limitations).

3 3 2 The FI discloses pricing information in public domain.3 4 - The FI leaves adequate time for client review and discloses at multiple times3 4 1 The FI communicates all information related to the product (terms, conditions, etc.) to clients

before signing.

3 4 2 The FI gives clients adequate time to review the terms and conditions of the product, ask questions and receive additional information prior to signing contracts.

3 4 3 The FI staff is available to answer questions.

3 5 - The FI provides accurate and timely account information


3 5 1 The FI gives clients a hard copy of all documents signed by clients (including, but not limited to the contract) with all terms and conditions. The FI ensures that there are no blank terms in all documents signed by clients (including, but not limited to, contracts) – they must be completely filled out.

3 5 2 [group lending] Each client receives a contract, and/or an individual pass/book or payment book with contact terms and signature (even if the contract is between the group and the financial institution).

3 5 3 The FI regularly gives clients clear and accurate information regarding their accounts (e.g., account statements, receipts, balance inquiries, proof of payment for loans).

3 5 4 The FI provides clients with updated balances on request.

4 - - Client Protection Principle 4: Responsible Pricing4 1 - The FI offers market-based, non-discriminatory pricing4 1 1 The FI offers market-based, non-discriminatory pricing. [savings]

* Savings rates are comparable with peers. Peer groups defined as: country, scale, and level of financial intermediation (low and high, per MIX).* FI pays interest on all deposit/savings accounts, but not necessarily compulsory deposits; interest rates are in line or above peers.* Interest rates are calculated on a daily balance

4 2 - The FI’s efficiency is in line with its peers4 2 1 The FI has efficiency ratios aligned with peers.

4 3 - The FI does not charge excessive fees


4 3 1 The FI's pre-payment penalties, account closure fees, transaction fees or other penalties are not excessive.

5 - - Client Protection Principle 5: Fair and Respectful Treatment of Clients5 1 - The FI culture raises awareness and concern about fair and responsible treatment of

clients5 1 1 The FI clearly spells out in a Code of Conduct (i.e., in Code of Conduct, Code of Ethics, Book of

Staff Rules) the organizational values and standards of professional conduct that are expected of all staff.

5 1 2 The FI's Code of Conduct has been reviewed and approved by the Board.

5 1 3 The FI's staff signs a document by which they acknowledge that they will abide to the standards of professional conduct and not engage in the prohibited behaviors mentioned in the Code of Conduct.

5 2 - The FI has defined in specific detail what it considers to be appropriate debt collection practices

5 2 1 The FI clearly spells out in a Code of Conduct (i.e., in Code of Conduct, Code of Ethics, Book of Staff Rules) the specific standards of professional conduct that are expected of all staff involved in collection (including third party staff).

5 2 2 The FI does not endorse a policy of zero tolerance for PAR.


5 2 3 The FI's policy guarantees that clients receive a fair price for any confiscated assets; Has procedures to ensure that collateral seizing is respectful of clients' rights; Offers an explanation of the role of guarantors. In case collateral is kept in the financial institution premises, procedures are in place to ensure its security.

5 3 - The FI's HR policies (recruitment, training) are aligned around fair and responsible treatment of clients

5 3 1 The FI staff is recruited and trained in line with the Code of Ethics.

5 3 2 The FI staff is trained in line with the Code of Ethics: initial training includes a review of the Code of Conduct and a discussion with new staff on the situations where the compliance with the Code might be a challenge.

5 3 3 The FI's collection practices are covered during the initial training of all staff involved in collections (loan officers, collections staff, and branch managers). In particular, collections staff receives training in acceptable debt collections practices and loan recovery procedures.

5 4 - The FI implements policies to promote ethics and prevent fraud5 4 1 The FI managers and supervisors review ethical behavior, professional conduct and the

quality of interaction with customers as part of staff performance evaluations.


5 4 2 The FI's procedures describe the sanctions that will be taken in case of violation of the Code of Conduct or collections policies (harassment, discrimination, theft, corruption, kickbacks, etc.), that can result in termination of employment.

5 4 3 The FI staff is informed of penalties for non-compliance with Code of Conduct or collections policies.

5 4 4 There is sufficient monitoring of the practices (by operations department, internal audits), to provide education or sanctions as necessary.

5 4 5 The FI sanctions cases of violations of the Code of Conduct or collections policies (identified by management, internal audit or thanks to an efficient complaint mechanism) according to the set rules.

5 4 6 The loan officer base pay is at least a living wage.

5 5 - In selection and treatment of clients, the FI does not discriminate inappropriately against certain categories of clients

5 5 1 The FI has a non-discrimination policy.5 5 2 The FI's rescheduling policies are applied in a consistent and fair way across the financial

institution.5 6 - In-house and 3rd party collections staff are expected to follow the same practices as the

FI staff5 6 1 The same training is provided to third party collections staff in case collection is

subcontracted and they are held to the same standards as the FI staff.

5 7 - The FI informs clients of their rights


5 7 1 The FI informs clients of the main aspects of the Code of Conduct. Information includes clients’ right to complain and how to submit a complaint.

5 7 2 [group lending] The FI informs clients about procedures about collateral seizing.

5 7 3 The FI documents and communicates to clients loan policies and procedures for rescheduling credit.

6 - - Client Protection Principle 6: Privacy of Client Data6 1 - The FI has a privacy policy and appropriate technology systems6 1 1 The FI has a written privacy policy that governs the gathering, processing, use, distribution

and storage of client information. The policy covers current staff and those who leave the organization and information leakage.

6 1 2 The FI's privacy clause is in plain language and not hidden in legalese or contract. The privacy clause stands out and is not in small print.

6 1 3 The FI's Staff Book of Rules and/or Code of Conduct penalize misuse or misappropriation of client data.

6 1 4 The FI has penalties for exposing or revealing client data to third parties without prior client consent.

6 1 5 The FI's has systems in place (including secure IT systems) to protect the confidentially, security, accuracy and integrity of customers’ personal and financial information.

6 1 6 The FI's IT systems in place have different password protection systems that are changed periodically with different access levels according to the position of the staff member accessing the data.


6 1 7 If files are stored in physical format, the FI stores the client files in a secure location, within the branch or headquarters that has 1) restricted access only to selected persons; 2) is kept in a facility secure from arson or theft.

6 2 - The FI informs clients about when and how their data is shared and gets their consent6 2 1 The FI has a policy (included in the training manual) to describe how to talk to clients about

this topic. Requires that the FI present clearly to clients how it will use and share their client data.

6 2 2 The FI communicates well the privacy policy to staff.

6 2 3 The FI trains its staff to protect the confidentially, security, accuracy and integrity of customers’ personal and financial information.

6 2 4 The FI informs customers how their information will be used internally and, when applicable, when it will be shared externally.

6 2 5 Prior to loan disbursement, the FI's staff reads the privacy portion of the contract to the client.

6 2 6 The FI's contracts include a data privacy clause, describing how and when data can be shared (in addition to credit bureau information).

6 2 7 The FI requires written client consent to share personal information with any external audience, including credit bureaus, insurance agents, collections companies, and others.

6 2 8 The FI requires written client consent to use of information or photos in promotions, marketing material and other public information.


6 2 9 [group lending] The FI trains group leaders to safeguard group member information, particularly saving account balances, dates of loan disbursement, and information on repayment problems.

7 - - Client Protection Principle 7: Mechanisms for Complaints Resolution7 1 - The FI's clients are aware of how to submit complaints7 1 1 The FI informs clients about:

• their right to complain; and • how to submit a complaint to the appropriate person (or where they could find that information if they don’t know it first-hand).

7 2 - The FI's staff is trained to handle complaints7 2 1 The FI's dedicated staff induction training includes a session on how the complaints

mechanism works, the loan officer’s role in the process and how to appropriately manage complaints until they are completely resolved (how to handle complaints and refer them to the appropriate person for investigation and resolution).

7 3 - The FI's complaints resolution system is active and effective7 3 1 The FI's policies include how to handle complaints. They include how to inform client about

the complaint mechanism.

7 3 2 The FI has an effective, appropriate system in place to resolve complaints in a timely way.

7 3 3 The FI has assigned someone to handle complaints and refer them to the appropriate person for resolution, at least on a part-time basis.

7 3 4 The FI has a clear reporting system in place to ensure that complaints from branches/POS reach complaints handling staff.

7 3 5 The complaints mechanism is actively used by clients.


7 3 6 The FI's clients receive a timely response to their issues, within a month of complaint submission.

7 3 7 The FI's internal audit or other monitoring systems check that complaints are resolved satisfactorily.

7 4 - The FI uses client feedback to improve practices and products7 4 1 The FI uses information to correct mistakes, omissions and activities that may be harmful to

the client.7 4 2 The FI uses complaints information to improve the organization's operations/products/

communications.


annex 1: smart campaign role vis-à-vis prudential …… · web view7/28/2014 · building off...

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