Procedure for Conducting Remote Verification of Published Information of Credit Financial Organizations

«Approved» by the Resolution of the Board of Directors of the National Bank of Tajikistan of "26" October 2020 No. 141

PROCEDURE FOR CONDUCTING REMOTE VERIFICATION OF PUBLISHED INFORMATION OF CREDIT FINANCIAL ORGANIZATIONS

The Procedure for conducting remote verification of published information of credit financial organizations (hereinafter - the Procedure) is developed with the aim of identifying facts of violations of the rights and interests of consumers of services of credit financial organizations by conducting verification of the information published by them. It is intended for official use by the National Bank of Tajikistan and establishes the process of conducting remote verifications (hereinafter - verification) of credit financial organizations, the sequence and deadlines for their conduct, and the generalization and presentation of their results.

CHAPTER 1. GENERAL PROVISIONS

1. The task of the verification is to detect, at an early stage, situations threatening the interests and rights of consumers of services of credit financial organizations (hereinafter - consumers) through systematic control, which is one of the early warning systems.

2. Verifications represent a systematic process of analyzing the activities of credit financial organizations, conducted by the National Bank of Tajikistan based on information disclosed/published by credit financial organizations to consumers through public informational materials, individual informational materials, as well as based on internal regulatory documents obtained from credit financial organizations to conduct verification for compliance with the requirements of laws and other normative legal acts, with the aim of identifying violations and risks infringing on the rights and interests of consumers.

3. During verifications:

• violations of the requirements of laws and other normative legal acts by credit financial organizations are identified;
• the causes of violations are examined;
• the consequences of violations are assessed;
• necessary measures are taken to eliminate them.

4. Timely and correct identification of risks infringing on the rights and interests of consumers, and the definition of tasks for their prevention, allow increasing the overall efficiency of supervision through the rational use of supervisory resources and planning of verifications in credit financial organizations.

5. This Procedure formulates the necessary and mandatory processes for the verification of credit financial organizations and does not exclude that, during the conduct of verifications, it may be possible to initiate and conduct other additional processes. The authorized subdivision of the National Bank of Tajikistan for conducting verifications is the Consumer Protection Department for Financial Services (hereinafter - the Department).

CHAPTER 2. DIRECTIONS, PREPARATION AND DEADLINES FOR CONDUCTING REMOTE VERIFICATIONS

6. Verifications are carried out in the following areas:

• verification of information published on the official website and pages of credit financial organizations in social networks;
• verification of information in public and individual informational materials published by credit financial organizations.

7. Verification of credit financial organizations is conducted on the basis of an annual plan for conducting verifications (hereinafter - Verification Plan). The Verification Plan is developed by the Department and, after agreement with the Deputy Chairman of the National Bank - supervisor of the Department, is approved by the Chairman of the National Bank of Tajikistan.

8. Verifications of credit financial organizations are conducted by the Department for Consideration of Appeals and Supervision of Financial Organizations (hereinafter - the Section) of the Department.

9. Based on the Verification Plan, the Section develops for each area subject to verification a program (schedule) of verifications, which is approved by the Head of the Department five days before the start of each verification.

10. Outside the verification program, the Department may conduct targeted/thematic (as necessary) verifications. In this case, the Section develops a program for conducting a targeted/thematic verification, which is approved by the Head of the Department. The program for conducting a targeted/thematic verification must contain information provided for in paragraphs 14 and 15 of this Procedure.

11. Unscheduled verifications of credit financial organizations are also carried out by order of the management of the National Bank of Tajikistan.

12. In the event that, upon completion of the verification, deviations from the initially approved program become obvious, the verifying officer provides the Head of the Section with detailed explanations regarding the planned schedule and deviations from it.

13. Verifying officers preparing the verification program are obliged to prepare verification reports, as well as remarks and proposals.

14. The remote verification program includes:

• justification for the necessity of the verification;
• source of the information being verified;
• goal and areas of verification;
• deadlines for conducting the verification;
• names of credit financial organizations;
• first and last names of the verifiers;
• other important information.

15. The verification program also includes information on how many employees and working hours were allocated for conducting the verification in each area. In addition, the priority of verification areas is determined. The time allocated for the verification of each area is determined based on the experience of previous verifications, the goals of the verifications, the number of verifiers, and so on. Forecasts of the necessary number of hours for each verification area should subsequently be compared with actual results.

16. Verification programs must serve as a tool for controlling the conduct of supervisory work.

17. Verification in each area begins with the collection of information about credit financial organizations.

18. For the purpose of verifying the accuracy of information, information about credit financial organizations obtained from any other source is also of extreme importance. Comparison of such information can be useful from the point of view of identifying hidden risks.

19. To ensure the efficiency and consistency of verifications, it is also necessary to use:

• information obtained from the licensing system of the National Bank of Tajikistan;
• applications submitted to the National Bank of Tajikistan by consumers, the results of their analysis, and prepared reports;
• results of analysis and reports on phone calls received via the hotline of the National Bank of Tajikistan;
• information obtained by other subdivisions of the National Bank of Tajikistan, as well as other state and non-state structures;
• information contained in letters and notifications received by credit financial organizations from the National Bank of Tajikistan in previous and current time periods;
• results of verifications conducted in credit financial organizations;
• information and data obtained from other reliable sources.

20. If necessary, for the purpose of analysis, the Department may request additional information from other relevant subdivisions of the National Bank of Tajikistan.

CHAPTER 3. PROCESSES FOR CONDUCTING REMOTE VERIFICATIONS BY AREA

21. During the verification of each area, the verifier determines whether the information of credit financial organizations being verified is understandable, accurate, complete, comparable, and timely. The verifier must check whether the consumer can easily read and understand the published or provided information.

22. The verifier analyzes whether the information being verified in each separate area contradicts legislative requirements aimed at protecting consumer rights.

23. The verifier analyzes the accuracy of the information, compares it with information of a similar type obtained as a result of verifications in other areas specified in paragraphs 18-20, to determine whether they contradict each other.

24. In the event that the information being verified contains absolute or approximate numbers and estimates (for example, the words "more than", "approximately" precede the presented figures, or characteristics such as "best", "most convenient" are used, etc.), the verifier must ensure that the presented figures are not presented in a minimized or exaggerated manner.

25. In the event that the information contains indicators of the effective interest rate, the verifier must check whether they are calculated correctly.

26. The verifier identifies and examines the accuracy of information published in the media to ensure the absence of discrepancies between the information presented to the National Bank of Tajikistan and published in the press, to check that they are not accidental and are not the result of a technical error or intentional distortion of facts.

27. In the event that the published information contains comparisons, the verifier checks whether such comparisons are appropriate, and the corresponding sources of information are accurate and reliable. Information published by the National Bank of Tajikistan may serve as sources for verifications.

28. Verification of information published by credit financial organizations on their websites and pages in social networks is carried out to check its compliance with requirements established by legislation and other normative legal acts of the National Bank of Tajikistan.

29. The verifier checks the presence and content of information about credit financial organizations, about services provided, about the feedback mechanism, about the hotline service, online services, checks the operation of installed credit/Islamic financing and deposit/Islamic deposit calculators, and the accuracy of the links provided. The verifier must ensure that links to other websites provided on the pages not only work, but also contain the information described in the link title.

30. The verifier must check for the absence of similar websites misleading in name and address with the credit financial organization being verified and ensure that there is no more than one official website of the credit financial organization.

31. In the event that a violation/omission on the website of a credit financial organization requires urgent resolution or correction, or if the problem is of a technical nature and can be easily corrected, the verifier, with the consent of the supervisor, contacts the corresponding employee of the credit financial organization and presents the detected problem to them for the purpose of carrying out necessary measures to eliminate it. In the event of detection of each violation/omission on the website of a social network of a credit financial organization, the verifier, as a basis, fixes an image that is currently displayed on the computer screen, using the "Print Screen" function, so that the month, date, and hour are clearly visible.

32. The verifier saves/registers such violations/omissions in the corresponding folder of the section, opened for each credit financial organization according to the relevant verification area on the computer.

33. In the event of detection of violations/omissions, the verifier prepares a report in accordance with Appendix No. 4 to this Procedure.

34. Verification of public and individual informational materials is carried out by obtaining these materials or their content from credit financial organizations in accordance with the conditions established by this Procedure and by checking the compliance of the materials obtained during the verification with the requirements established by legislation and other normative legal acts of the National Bank of Tajikistan.

35. During the verification of information bulletins, attention is paid not only to their content, but also to their format and design.

36. The verifier checks and analyzes whether the form, structure, or design of the presented information can mislead consumers.

37. The verifier prepares a report on identified violations/omissions in accordance with Appendix No. 5 to this Procedure and submits it for agreement to the Head of the Section and the Head of the Department within four working days.

38. The Heads of the Department and the Section examine the Report within five working days in accordance with the procedure established by this Procedure and, if necessary, make changes to it.

39. After that, the report is numbered in accordance with the document flow order in the National Bank of Tajikistan, and the necessary information about the type of credit financial organization and the area of verification is entered.

40. Next, the report (Appendix No. 4 to this Procedure), after agreement with the supervisor of the Department, is submitted for approval to the Chairman of the National Bank of Tajikistan.

41. In the event of identification of violations of the rights and interests of consumers, the Department, based on the specified report (Appendix No. 4 to this Procedure), within four working days in accordance with Article 48 of the Law of the Republic of Tajikistan "On the National Bank of Tajikistan" and the "Procedure for applying urgent corrective measures and impact measures to credit financial organizations by the National Bank of Tajikistan", determines urgent corrective measures and impact measures for future application, which are reported to the management of the National Bank of Tajikistan.

CHAPTER 4. REGISTRATION AND GENERALIZATION OF VERIFICATION RESULTS

42. Reports on violations/omissions identified in the line of each credit financial organization, as well as grounds, must be numbered and stored in corresponding folders for a period of no less than 3 years.

43. All documents, reports, grounds, materials collected during verifications, and other documents related to verifications are kept in separate folders by verification.

44. Documents in verification folders are stored in the following order:

• verification period;
• area of verification;
• type and name of the credit financial organization.

45. All violations/omissions identified during verifications are registered in the electronic register of verifications of credit financial organizations (hereinafter - Register), located in the "Verification" folder.

46. Access to the Register is authorized for the Head of the Department (acting Head of the Department), the Head of the Section, and employees of the Section.

47. The Register of violations/omissions is filled out in the following order:

• name of the credit financial organization;
• area of verification;
• form of service;
• mark on the detection of a violation/omission and its content;
• first and last name of the recording person (verifier);
• report number and date;
• date of recording the violation/omission;
• date and type of measures taken in connection with the elimination of the violation/omission, brief description, if the violation/omission was eliminated, deadline for elimination, amount of fine (in the event that the measure was not carried out, brief justification);
• other information, if necessary;
• certificate of the results of measures taken in connection with the violation/omission, and the date of its preparation.

48. The verifier fills out the electronic verification register in accordance with Appendix No. 5 to this Procedure, after numbering the report, no later than three working days.

49. In the event that, during measures to verify a credit financial organization, a deadline for eliminating violations/omissions is given, this is indicated in the electronic verification register.

50. Based on the results of the verification of the credit financial organization, the verifier prepares the following generalized reports:

• report on the general results of verifications (Appendix No. 1 to this Procedure);
• report on the results of verifications by credit financial organizations (Appendix No. 2 to this Procedure);
• report on issues requiring urgent resolution identified during verifications (Appendix No. 3 to this Procedure).

51. The report on the general results of verifications includes (Appendix No. 1 to this Procedure):

• the time period during which the report was prepared;
• date of submission;
• first and last name of the verifier preparing the report;
• areas of verification, based on the results of which this report was prepared;
• total number of detected violations (for the current and previous year);
• total number of detected omissions (for the current and previous year);
• measures that were carried out in connection with the detected violations/omissions;
• other remarks, including those regarding the elimination of detected significant problems, a plan of measures to minimize the negative impact of identified violations and their further elimination.

52. The report on the results of verification by credit financial organizations is prepared after each verification by generalizing and analyzing its results. This report includes (Appendix No. 2 to this Procedure):

• the time period during which the report was prepared;
• date of submission of the report;
• first and last name of the verifier preparing the report;
• areas of verification based on the results of which this report was prepared;
• name of the credit financial organization that committed the violation/omission;
• measures carried out in connection with the detected violations/omissions;
• other proposals, including those regarding the elimination of detected significant problems, a plan of measures to minimize the negative impact of identified violations and their further elimination.

53. The report on issues requiring urgent resolution identified during verifications is prepared as necessary and includes (Appendix No. 3 to this Procedure):

• the time period during which the report was prepared;
• date of submission of the report;
• first and last name of the verifier preparing the report;
• brief summary of the content of identified violations/omissions;
• name of the credit financial organization that committed the violations/omissions;
• possible consequences and negative impact of detected violations/omissions on consumers;
• proposed measures;
• other proposals, including those regarding the elimination of detected significant problems, a plan of measures to minimize the negative impact of identified violations and their further elimination.

54. The verifier saves the reports in the corresponding folder for the given time period in electronic form.

55. Reports provided for in paragraph 50 of this Procedure are submitted to the Head of the Department.

Appendix No. 1 to the Procedure for conducting remote verification of published information of credit financial organizations

Report on the general results of remote verifications of the banking system

Reporting period:_________________ Date of submission:_______________ Specialist's Name:_________________________________________

Area of Verification	Number of Detected Violations (Current/Previous Year)	Number of Detected Omissions (Current/Previous Year)	Measures Taken	Remarks
1. Internet Site	/ /	/ /	/ /	/ /
2. Social Networks	/ /	/ /	/ /	/ /
3. Public Informational Materials	/ /	/ /	/ /	/ /
4. Individual/Personal Informational Materials	/ /	/ /	/ /	/ /
5. Media Materials	/ /	/ /	/ /	/ /

Appendix No. 2 to the Procedure for conducting remote verification of published information of credit financial organizations

Report on the results of remote verifications by credit financial organizations

Reporting period:_________________ Date of submission:_______________ Specialist's Name:_________________________________________

Area of Verification	CFOs Committing Violation/Omission (Name of CFO)	Measures Taken	Remarks
1. Internet Site
2. Social Networks
3. Public Informational Materials
4. Individual/Personal Informational Materials
5. Media Materials

Appendix No. 3 to the Procedure for conducting remote verification of published information of credit financial organizations

Report on issues requiring urgent resolution identified during remote verification

Reporting period:_________________ Date of submission:_______________ Specialist's Name:_________________________________________

Brief Description of Violation/Omission	CFO Committing Violation/Omission (Name of CFO)	Possible Negative Consequences	Proposed Measures	Remarks
1.
2.

Appendix No. 4 to the Procedure for conducting remote verification of published information of credit financial organizations

Report on violation/omission in the activities of a credit financial organization

Report No.______________________________________________ Report Date:__________________________________________ Type and Name of CFO:_______________________________________ Area of Verification:______________________________________________ Verification Period: from______ to ________ Content of Violation/Omission: ________________________ Grounds for Violation/Omission: ____________________________ Number of Violations/Omissions:_____________________ Name of Person Preparing the Report:_____________________ Signature of Person Preparing the Report:__________________________

Appendix No. 5 to the Procedure for remote verification of published information of credit financial organizations

Electronic Register of Remote Verifications of CFOs

N	Type of CFO	Name of CFO	Area of Verification	Type of Service	Detected	Name of Person Preparing Report	Report	Violation/Omission Registered (Indicate Quantity)	Applied Measure of Responsibility	Result	Remarks
								Violation/Omission	Content	Date	Number
1	2	3	4	5	6	7	8	9	10	11	12