A person or entity having a bank account or a loan with a financial institution is a consumer of financial services. As a consumer of a financial service one has certain rights, and the consumer group as a whole should get adequate protection in a financial market. A financial system can protect consumer rights if it can offer transparency and appropriate choices. Consumer protection is designed to ensure the rights of consumers as well as fair trade, competition and accurate information in the marketplace. In order to enforce rights of the consumers, they need to be aware of what those rights are. In most countries, a commission on consumers' right and protection provides information on their rights, costs, risks and benefits of different financial products. Consumer protection code for financial institutions also exists in several instances that prescribe how a financial institution deals with consumers. The relevant product information and consumer protection codes are crucial for protecting consumers' rights. The central bank of a country could play crucial role in this connection.
Customers' right and protection and better service get due emphasis in the strategies of Bangladesh Bank (BB). To ensure improved customer service, a 'Customer Interest Protection Centre' (CIPC) was established in the head office and branch offices of BB in March 2012. Since the inception of the CIPC, complaints have been coming to this center every day through telephones, mobile phones, e-mail and by post. A new department named 'Financial Integrity and Customer Services Department' has since been opened for dealing with the complaints of the customers and clients of banks and financial institutions more quickly and easily.
Since the establishment of CIPC, complaints are being lodged every working day through phone, fax, email, SMS, website and postal service from all over the country. Electronic complaint form is available in the Bangladesh Bank website to facilitate quick submission of complaints. To make CIPC service available, a hotline number "16236" was launched formally in January, 2012 and a huge awareness programme was undertaken to familiarise this number. This hotline number has been advertised in the print and electronic media. All mobile phone customers have been informed via SMS about the effectiveness of this hotline service through Bangladesh Telecommunication Regulatory Company. All banks and non-bank financial institutions (NBFIs) have been advised to display stickers in every branch so that general customers can use this hotline number to place their complaints as and when required. This hotline number has already been proved to be effective to improve the overall banking services by this time. Moreover, daily newspapers and Bangladesh Bank websites published names, designations, numbers of phone and fax as well as email addresses of the CIPC officials. According to BB statistics, the department resolved in 2013 about 70 per cent complaints, and settled over 96 per cent and 100 per cent complaints in 2014 and 2015 respectively. In addition to resolve the complaints and the problems of clients, CIPC is also disseminating advice and opinions of banking and business activities to the people.
Currently, consumers have the scope to know simplified, adequate, and comparable information about the prices, terms and conditions, and inherent risks of financial products and services. The central bank has strengthened requirements for disclosing standardised and comparable pricing information on financial products. For the improvement of the standard of customer services the banks have been advised to rationalise the charges realised from the customers, the Bangladesh Bank instructed banks to display the chart of the deposit and interest rate as well as the schedule of charges in the suitable and easily noticeable places in banks and also in their respective web-sites. Financial statements of all banks are now prepared in accordance with Bangladesh Accounting Standards and Bangladesh Reporting Standards. The central bank is also very closely monitoring the fair view of annual reports of banks for ensuring availability of proper information for stakeholders.
The information dissemination strategy of the BB is connected with the adoption of greater transparency and democratic approach in policy making. By publishing 'Financial Stability' report each year, BB gives information on the financial market to the stakeholders. In this connection, BB targets to adopt up-to-date policy approach with a view to improving mass people's progress through maintaining high economic growth and financial stability. That is why, alongside employing modern communication channels and tools, BB is motivating the entire financial sector to take advantage of the latest technology. In a recent initiative, the Social Media Communication Gateway has been officially launched in the Bangladesh Bank so that the mass people can see the activities of Bangladesh Bank through Facebook, YouTube, and Twitter. Beside this, BB has also published many leaflets, posters and brochures containing messages for safeguarding the interest of the general people.
Financial inclusion drives of the BB have brought remarkable improvements in several socio-economic fronts and theconsumer base of banks improved remarkably. Notable changes have taken place in terms of higher access to finance and increased geographical penetrations of the financial services. The changed approach of banking expanded credit flow to agricultural, SME, and environmentally-friendly sectors, and brought a large number of un-banked/under-banked socially disadvantaged people into the ambit of financial services. A considerable number of vulnerable people have opened accounts with the banks, and the central bank has established refinance schemes targeting different underprivileged groups. Inclusive drives of the Bangladesh Bank have also been rightly addressing the issues of financial literacy and consumer protection targeting mainly the vulnerable section.
Consumer consciousness is of utmost importance to protect consumers' rights which is directly connected with financial literacy. Alongside help reducing the demand-side barriers to financial inclusion, improved financial literacy can increase awareness about products and services, as well as confidence and ability in using them. Consumers' lack of knowledge and experience with financial issues may put them in a disadvantaged position with respect to banks, microfinance institutions, and informal lenders, thus increasing the probability that they fall victim to fraud or abuse. Bangladesh Bank introduced 'Financial Literacy Campaign' in May 2013 with a formal setup under which, dissemination of information regarding financial literacy has been going on by the print media. Initially some programmes were also broadcasted by television and radio. And several road shows were arranged. For disseminating information and awareness, Bangladesh Bank is taking various initiatives not only within the country but also abroad from where the country receives notable amount of remittances. Skill development training programmes were arranged on several occasions to educate SME (small and medium enterprises) entrepreneurs, especially women. Banks were instructed to arrange customer conferences at branch levels and introduce simplified KYC (know your customer) for school-going children, leather industry employees and cleaners of the Dhaka City Corporations. BB makes arrangement to publish advertisements in national dailies to promote awareness on relevant issues. Very recently a banking fair was organised by BB for the first time that received good response from different quarters.
Incorporation of technology, financial literacy initiatives and coordination and linkages brought new dimension in consumer protection. Bangladesh Bank first took a well-planned initiative to spread relevant information for the consumers in an organised manner with financial assistance of UK-based UKAID. With the initiative of the Bill and Melinda Gates Foundation, and joint participation of Bangladesh Bank and Microcredit Regulatory Authority, an Interactive website, FSPMaps.com, was opened in October 2013 with the aim of disseminating information to bring financial services to the doorsteps of the marginalised segments of society. By using this website, one can gather the locations of financial service providers in his vicinity as well as other important information. The location of financial service providers such as bank branches, ATMs, microfinance institutions, cooperatives, mobile money agents, and post offices has been identified in this website.
Initiatives of the central bank have already brought noticeable change in the banking market in terms of protecting consumer rights. It is good that a foundation has already been laid and banks have been responding positively to the Bangladesh Bank's initiatives. It is time that all banks designed and enforced their own customer protection strategies and codes for establishing a fairer and just market environment.
Dr. Shah Md. Ahsan Habib is Professor and Director (Training), Bangladesh Institute of Bank Management (BIBM).