Regulation No. 001/2019 on Consumer Protection for Financial Products and Services

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BANQUE DE LA REPUBLIQUE DU BURUNDI / IBANKI YA REPUBURIKA Y’UBURUNDI REGLEMENT N° 001/2019 RELATIF A LA PROTECTION DES CONSOMMATEURS DES PRODUITS ET SERVICES FINANCIERS ITEGEKO INOMERO 001/2019 RIKINGIRA ABANYWANYI B’AMASHIRAHAMWE ARANGURA IBIKORWA BIJANYE N’URUDANDAZWA RW’AMAFARANGA

PREAMBLE / INTUMBERO Y'IRI TEGEKO The ever-increasing complexity and diversity of financial products and services offered by providers in Burundi require enhanced consumer protection. The Central Bank recognizes that risks of fraud, abuse, and misconduct cannot be excluded to the detriment of consumers, especially those who are uninformed or lack adequate knowledge of their rights and obligations. Accordingly, establishing a consumer protection framework strengthens fundamental knowledge and rights, serves as an important source of financial sector discipline, stimulates competition, and encourages providers to offer better products and services to an informed consumer market. A regulatory framework for consumer protection is fundamental to increasing access, usage, and quality of financial products and services, contributing to sector stability. Consumer protection is a precursor to strengthening confidence in the formal financial sector and promotes financial inclusion. It ensures that benefits from increased access to formal financial products and services accrue to both consumers and the national economy as a whole. Consumer protection efforts aim to harmonize conditions applicable to financial service providers in their relations with existing and potential clients. Confident that good consumer protection practices positively influence the financial sector, the Central Bank issues this Regulation to protect consumers and ensure confidence in Burundi’s financial sector, pursuant to Article 7 of Law No. 1/34 of December 2, 2008, establishing the Statutes of the Banque de la République du Burundi. Furthermore, this Regulation references Law No. 1/17 of August 22, 2017, governing banking activities, which stipulates in Article 17 that upon authorization, the Central Bank also assesses the applicant’s capacity to operate securely. The applicant must possess appropriate means compatible with the proper functioning of the banking and payment system in Burundi, ensuring satisfactory consumer protection.

TABLE OF CONTENTS / IBRIMVO

• CHAPTER I: SCOPE, OBJECT AND DEFINITIONS (p. 8)
• CHAPTER II: OBLIGATIONS OF FINANCIAL PRODUCT AND SERVICE PROVIDERS (p. 11)
  • SECTION 1: FAIRNESS IN THE OFFER OF FINANCIAL PRODUCTS AND SERVICES (p. 11)
    • SUB-SECTION 1: GENERAL REQUIREMENTS (p. 11)
    • SUB-SECTION 2: DEBT COLLECTION (p. 15)
    • SUB-SECTION 3: OPENING, CLOSING AND MANAGEMENT OF CONSUMER ACCOUNTS (p. 18)
  • SECTION 2: RELIABILITY OF FINANCIAL PRODUCTS AND SERVICES (p. 22)
    • SUB-SECTION 1: UPDATING CONSUMER INFORMATION (p. 22)
    • SUB-SECTION 2: MECHANISMS TO STRENGTHEN CONSUMER CONFIDENCE (p. 23)
    • SUB-SECTION 3: DIGITAL FINANCIAL SERVICES (p. 28)
  • SECTION 3: TRANSPARENCY IN THE OFFER OF FINANCIAL PRODUCTS AND SERVICES (p. 31)
    • SUB-SECTION 1: INFORMATION AND ADVICE TO CONSUMERS (p. 31)
    • SUB-SECTION 2: BUSINESS CONDUCT (p. 35)
    • SUB-SECTION 3: PRICING OF PRODUCTS AND SERVICES (p. 38)
    • SUB-SECTION 4: MARKETING AND ADVERTISEMENTS (p. 40)
• CHAPTER III: HANDLING OF COMPLAINTS AND APPEALS (p. 41)
  • SECTION 1: GENERALITIES (p. 42)
  • SECTION 2: COMPLAINT HANDLING PROCEDURES (p. 42)
  • SECTION 3: MAINTENANCE OF REGISTERS AND REPORTS ON COMPLAINTS (p. 45)
• CHAPTER IV: FINAL PROVISIONS (p. 47)

LEGAL BASIS / YIHWEJE IBWIRIZWA... The Banque de la République du Burundi hereby issues this Regulation, having reviewed:

• Law No. 1/34 of December 2, 2008, establishing the Statutes of the Banque de la République du Burundi;
• Law No. 1/17 of August 22, 2017, governing banking activities;
• Law No. 1/02 of February 4, 2008, on the fight against money laundering and terrorist financing;
• Law No. 1/09 of May 30, 2011, establishing the Private Companies and Public Participation Code;
• Law No. 1/01 of January 16, 2015, revising Law No. 1/17 of April 26, 2010, establishing the Commercial Code;
• Law No. 1/01 of January 5, 2016, revising Decree-Law No. 1/41 of July 9, 1993, defining credit-lease operations and applicable provisions for credit-lease contracts and regulating the exercise of these activities;
• Law No. 1/10 of August 12, 2016, governing conventional movable property security in Burundi;
• Law No. 1/07 of May 11, 2018, establishing the national payment system;
• Regulation No. 001/2018 on microfinance activities in Burundi;
• Regulation No. 001/2017 on payment services and payment institution activities;
• Regulation No. 002/2017 on commercial agents in banking and payment services operations;
• Exchange regulations.

CHAPTER I: SCOPE, OBJECT AND DEFINITIONS / IGICE CA MBERE Article 1: Scope of Application / Ingingo ya 1: Abo iri tegeko ryerekeye The provisions of this Regulation apply to:

1. any authorized provider of financial products and services by the Banque de la République du Burundi;
2. any Agent of a financial product and service provider registered with the Banque de la République du Burundi.

Article 2: Object / Ingingo ya 2: Intumbero y’iri tegeko The object of this Regulation is to:

1. promote good practices of financial product and service providers by establishing minimum consumer protection standards;
2. promote financial education and increase transparency to enable consumers of financial products and services to make informed decisions in their relations with providers;
3. strengthen confidence in the financial sector by ensuring that providers offer quality products and services meeting consumer needs;
4. encourage financial product and service providers to establish effective mechanisms for handling consumer complaints regarding the offer of financial products and services.

Article 3: Definitions / Ingingo ya 3: Insiguro y’amajambo For the purposes of this Regulation, the following terms are defined as:

1. Agent: Commercial agent as defined in Law No. 1/17 of August 22, 2017, governing banking activities.
2. Central Bank: Banque de la République du Burundi.
3. Bank Card: A card used to withdraw cash and obtain other services from an automated teller machine (ATM); pay for goods and services; or withdraw or deposit cash into a bank account via an Agent.
4. Dormant Account: A current account with no activity for a period of six (6) months.
5. Consumer: Any natural or legal person who uses, has used, or intends to use one or more products or services offered by financial product and service providers and their Agents.
6. Total Cost of Credit: The total cost paid by the credit applicant, calculated by adding all fees and commissions payable upon credit establishment and during its repayment period. It is the total amount to be repaid by the borrower minus the borrowed principal amount.
7. Financial Product and Service Provider: Any bank, financial institution, microfinance institution, exchange bureau, payment institution authorized by the Banque de la République du Burundi, as well as the National Post Office for financial products and services.
8. Personal Identification Number (PIN): A password or other secret code used by a cardholder to access financial services.
9. Complaint: Any written expression of dissatisfaction by a consumer regarding the services provided by financial product and service providers and their Agents.
10. Advertising: Any form of public communication intended to invite or encourage, directly or indirectly, a person to purchase or acquire a financial product or service.

CHAPTER II: OBLIGATIONS OF FINANCIAL PRODUCT AND SERVICE PROVIDERS / IGICE CA KABIRI SECTION 1: FAIRNESS IN THE OFFER OF FINANCIAL PRODUCTS AND SERVICES / AGACE KA 1 SOUS-SECTION 1: GENERAL REQUIREMENTS / AGAHIMBA KA 1 K’AGACE KA 1

Article 4: Fair and Honest Treatment of Consumers / Ingingo ya 4: Ugufata abanywanyi uko bibereye kandi ata buryarya Financial product and service providers and their Agents must treat their clients fairly at all levels of their relations. They must act with honesty and integrity in their dealings with consumers and offer financial products and services in a manner that strengthens consumer confidence in the sector.

Article 5: Prohibitions / Ingingo ya 5: Ibibujijwe Financial product and service providers and their Agents must not: a) engage in unfair, deceptive, or aggressive practices such as threatening, intimidating, oppressing, abusing, or humiliating a consumer; b) offer, accept, or demand bribes or other "gifts". The term "gifts" does not include promotional donations or materials provided to consumers in general, or to one or more specific categories of consumers; c) discriminate against a consumer based on sex, race, color, ethnic origin, tribe, place of birth, belief or religion, social status, political opinion, or disability; d) conclude a financial transaction with a consumer without ensuring that the consumer fully understands the nature of the proposed transaction;