CBN Develops Consumer Protection Framework

The Central Bank of Nigeria (CBN) has initialized processes that will see the development of an effective consumer protection framework to provide default standards for consumer service, market discipline and fair treatment of customers by financial institutions in the country.
This is in line with the core mandate of the Central Bank of Nigeria (CBN) to “promote a sound financial system.”
To facilitate this move, which will also promote public confidence in the country’s financial system, the CBN has sent a circular to all financial consumer stakeholders guaranteeing that the latitude and span of the framework will be guided by global best practices from regions with established financial consumer protection administrations, most notably, the G-20 High Level Principles on financial protection.
The proposed framework as contained in the circular from the Consumer Protection Department of the CBN, include the following eight principles; “The legal, regulatory and supervisory framework for financial consumer protection; Roles of regulation and other bodies in ensuring protection for consumers; Equitable and fair treatment of consumers; full disclosure and transparency in product structuring and deployment; Financial education and awareness by operators and regulators; Entrenching responsible conduct amongst operators and their agents; Protection of consumer assets against fraud and misuse; Protection of consumer data and privacy; Developing and implementing rules of competition.”
The G-20 High Level Principles on Financial Customer Protection were developed in a bid to standardize and develop common principles on customer protection in the financial services sector; an objective that finance ministers and central bank governors of G-20 countries deemed absolutely necessary in 2011 because consumer confidence in properly functioning financial services market promotes financial stability, growth, efficiency, and innovation especially in the long term.
As the CBN continues on this trajectory, it has called for stakeholder support and engagement by asking the general public for inputs so that the final framework will be robust, effective and representative of the uniqueness of the nation.

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