Circular No. 01/2020 on the Sanctions Matrix Applicable to Financial Products and Services Providers, Issued Pursuant to Regulation No. 001/2019 on Consumer Protection for Financial Products and Services

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1, Avenue du Gouvernement - P.O. Box 705 BUJUMBURA - Tel: (257) 22-20 40 00 / 22 22 27 44 - Fax: (257) 223128 - Email: brb@brb.bi Page 1/12 BANK OF THE REPUBLIC OF BURUNDI THE GOVERNOR CIRCULAR NO. 01/2020 ON THE SANCTIONS MATRIX APPLICABLE TO PROVIDERS OF FINANCIAL PRODUCTS AND SERVICES, ISSUED PURSUANT TO REGULATION NO. 001/2019 ON THE PROTECTION OF CONSUMERS OF FINANCIAL PRODUCTS AND SERVICES Having regard to Law No. 1/34 of December 2, 2008 establishing the Statutes of the Bank of the Republic of Burundi; Having regard to Law No. 1/17 of August 22, 2017 governing banking activities; Having regard to Law No. 1/07 of May 11, 2018 establishing the national payment system; Having regard to Regulation No. 001/2017 on payment services and payment institution activities; Having regard to Regulation No. 001/2018 on microfinance activities in Burundi; Having regard to Regulation No. 001/2019 on the protection of consumers of financial products and services; The Bank of the Republic of Burundi, hereinafter referred to as the "BRB", hereby issues this circular. Article 1: Purpose and Scope This circular aims to specify the sanctions applicable to providers of financial products and services authorized by the BRB in case of violation of the provisions of Regulation No. 001/2019 on the protection of consumers of financial products and services. Article 2: Categories of Offenses The offenses retained in the sanctions matrix are subdivided into the following categories:

1. offenses related to fairness in the offering of financial products and services;
2. offenses related to debt collection;
3. offenses related to the opening, closure, and management of consumer accounts;

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1, Avenue du Gouvernement - P.O. Box 705 BUJUMBURA - Tel: (257) 22-20 40 00 / 22 22 27 44 - Fax: (257) 223128 - Email: brb@brb.bi Page 2/12 4) offenses related to updating consumer information; 5) offenses related to mechanisms for strengthening consumer confidence; 6) offenses related to digital financial services; 7) offenses related to transparency in the offering of financial products and services; 8) offenses related to business conduct; 9) offenses related to pricing of products and services; 10) offenses related to marketing and advertising; 11) offenses related to the handling of complaints and appeals; 12) offenses related to complaint handling procedures; 13) offenses related to the maintenance of registers and reports on complaints. The offenses, the corresponding regulatory provisions, and the corresponding sanctions are recorded in the matrix annexed to this circular. Article 3: Procedure for Applying Sanctions To ensure progressive application of sanctions and give the provider of financial products and services the opportunity to implement appropriate corrective measures, the BRB follows the following procedure:

1. upon finding an offense or infringement, the BRB sends a request for explanation to the provider of financial products and services;
2. in case of an offense or infringement requiring immediate regularization and where the provided explanation is deemed unsatisfactory, the BRB issues a directive with a deadline beyond which a sanction may be imposed;
3. in case of an offense or infringement requiring complex corrective measures, the BRB may grant the provider a deadline for their implementation. Otherwise, it issues a directive with a deadline beyond which a sanction may be imposed; In case of an offense or infringement involving an Executive/Manager, the same procedure is applied: a request for explanations followed by a directive/warning serving as a final warning is issued before imposing a sanction. Article 4: Sanction for Cases Deemed Serious Notwithstanding the procedure described in Article 3 of this circular, for cases deemed serious, the BRB may directly apply sanctions after a request for explanations whose response is unsatisfactory or after hearing the concerned Executive/Manager. Article 5: Payment Method for Penalties In case of monetary sanctions, the corresponding amounts are either immediately settled by automatic debit from the provider's account held at the BRB or paid into a dedicated account opened at the BRB for those without accounts held by the latter. In case of monetary sanctions subject to restitution to the consumer, the corresponding amounts are immediately paid into the account indicated by the latter. Article 6: Damages and Interest Sanctions imposed by the BRB on the provider of financial products and services do not prevent the consumer from bringing an action for damages and interest for any harm suffered before the competent courts. Article 7: Entry into Force This circular enters into force on the day of its publication on the BRB website and in the Official Bulletin of Burundi. Done in Bujumbura, on 29/05/2020 Sincerely Jean CIZA Governor.-

Page 4/12 ANNEX TO CIRCULAR NO. 01/2020 ON THE SANCTIONS MATRIX APPLICABLE TO PROVIDERS OF FINANCIAL PRODUCTS AND SERVICES ISSUED PURSUANT TO REGULATION NO. 001/2019 ON THE PROTECTION OF CONSUMERS OF FINANCIAL PRODUCTS AND SERVICES I. OFFENSES RELATED TO FAIRNESS IN THE OFFERING OF FINANCIAL PRODUCTS AND SERVICES Art. 4, 5, 6, 7 and 8 SANCTIONS

1. Unfair and/or dishonest treatment of the consumer | Art. 4 and 5 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital
2. Unprofessional treatment of the consumer | Art. 6 and 7 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Absence of a consumer analysis sheet | Art. 7 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Contribution to consumer over-indebtedness | Art. 8 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital II. OFFENSES RELATED TO DEBT COLLECTION Art. 9, 10, 11, 12 and 13 Immediate non-restitution to the consumer of funds retained as collateral after normal settlement of the debt | Art. 9 | Disciplinary sanctions against Executives/Managers and immediate restitution to the consumer of the collateral amount Non-notification to the consumer, within regulatory deadlines, of the sale or transfer of the portfolio to another provider of financial products and services | Art. 9 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 5% of the amount of the sold or transferred portfolio without exceeding 0.25% of the mandatory minimum capital Failure to immediately inform the consumer about the collection of the debt by withdrawal from their other accounts held with the creditor | Art. 10 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Collection of the debt from a third party who did not sign the guarantee contract for the benefit of the consumer | Art. 10 | Disciplinary sanctions against Executives/Managers and immediate restitution of the amount improperly collected Non-compliance with procedures for implementing aval/guarantees | Art. 11 | - Disciplinary sanctions against Executives/Managers; and/or

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• Monetary sanction of 0.25% of the mandatory minimum capital

2. Non-compliance with procedures for realizing mortgage guarantees | Art. 12 and 13 | - Disciplinary sanctions against Executives/Managers; and/or

• Cancellation of the mortgage guarantee realization measure unless otherwise decided by other competent authorities; and/or
• Monetary sanction of 0.25% of the mandatory minimum capital III. OFFENSES RELATED TO THE OPENING, CLOSURE, AND MANAGEMENT OF CONSUMER ACCOUNTS Art. 14, 15, 16 and 17 Incomplete consumer identification leading to consumer confusion | Art. 14 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Non-compliance with directives on issuing account statements | Art. 15 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Deduction of account maintenance fees on a dormant account with a zero balance and no ongoing credit for the consumer | Art. 15 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.05% of the mandatory minimum capital; and/or
• Regularization of the account; Non-compliance with directives on closing a consumer account | Art. 16 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital; and/or
• Reopening of the account, if applicable, upon client request; and/or Charging fees or commissions for free services | Art. 17 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital; and/or
• Immediate restitution of the amount paid by the consumer for the service/performance IV. OFFENSES RELATED TO UPDATING CONSUMER INFORMATION Art. 18

Page 6/12 Failure to update consumer information at least annually | Art. 18 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital V. OFFENSES RELATED TO MECHANISMS FOR STRENGTHENING CONSUMER CONFIDENCE Art. 19, 20, 21, 22 and 23 Interruption of automated teller machine (ATM) services or other automatic channels for offering financial services for reasons other than maintenance services or an emergency beyond the provider's control | Art. 19 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to inform about the ATM maintenance period and indications of other ATMs in service as well as contact phone numbers for more information | Art. 19 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital 3. Failure to inform about available alternatives in case of operating system discontinuity | Art. 20 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital. Failure to inform the Central Bank, within regulatory deadlines, in case of operating system failure | Art. 21 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure in protecting and ensuring the confidentiality of consumer data and transactions | Art. 22 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Lack of physical infrastructure to ensure consumer confidentiality and security during withdrawals at counters and ATMs | Art. 22 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to display security advice to counteract possible fraudulent practices | Art. 23 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Absence of a 24/7 telephone communication service | Art. 23 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital VI. OFFENSES RELATED TO DIGITAL FINANCIAL SERVICES 4. 5. Art. 24, 25 and 26 6. Failure to compensate for a loss incurred by the consumer due to a failure of online service control systems | Art. 24 | Disciplinary sanctions against Executives/Managers and restitution to the client of the loss incurred due to the failure of online service control systems. 7. Failure to inform the consumer, via electronic messages, about all transactions carried out on their account in real time | Art. 24 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 20,000 per transaction 8. Absence of clear directives on error and fraud resolution procedures | Art. 24 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Issuance and delivery of a bank card to an unauthorized person | Art. 25 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 500,000 per case Failure to inform the consumer about fraudulent transactions | Art. 25 | Disciplinary sanctions against Executives/Managers and/or immediate restitution of the amount subject to fraud. Imposition by merchants of additional fees and commissions for credit card payments | Art. 25 | Disciplinary sanctions against Executives/Managers and/or immediate restitution of the amount corresponding to the additional fees paid

Page 8/12 VII. OFFENSES RELATED TO TRANSPARENCY IN THE OFFERING OF FINANCIAL PRODUCTS AND SERVICES Art. 27 and 31 Failure to provide the consumer with a document containing key information on the chosen financial product/service | Art. 27 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to give the consumer a copy of the terms and conditions related to the chosen financial product/service | Art. 27 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to notify, within regulatory deadlines, changes made to the terms and conditions of offering financial products and services as well as to fees and commissions applied | Art. 31 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to notify, within regulatory deadlines, the cessation of the offering of a financial product/service | Art. 31 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to notify, within regulatory deadlines, the relocation of premises | Art. 31 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital VIII. OFFENSES RELATED TO BUSINESS CONDUCT Art. 32, 33 and 34 Use of non-updated contract forms | Art. 32 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Omission of a clause clearly indicating the circumstances under which early repayment may be made and the methodology for calculating penalties and their justification | Art. 32 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Charging penalties related to early credit repayment in the absence of an express clause regarding it in the relevant contract | Art. 32 | Disciplinary sanctions against Executives/Managers and/or restitution of the penalty amount Failure to display all information concerning the conditions applicable to financial products and services | 1. Art. 33 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital

Page 9/12 in accordance with the form in Annex 1 of Regulation No. 001/2019 on the protection of consumers of financial products and services Failure to display additional information on the same form of Annex 1 of Regulation No. 001/2019 on the protection of consumers of financial products and services | 2. Art. 33 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital Failure to publish, at least in Kirundi and French, by display and otherwise, information relating to financial products and services | Art. 33 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital Failure to communicate to the Central Bank the conditions applied to financial products and services | Art. 33 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital Failure to communicate to the Central Bank, within regulatory deadlines, changes in the conditions applied to financial products and services | Art. 33 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of an amount of BIF 30,000 per day of delay, without exceeding 0.5% of the mandatory minimum capital Failure to translate all mandatory documents into Kirundi | Art. 34 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital IX. OFFENSES RELATED TO PRICING OF PRODUCTS AND SERVICES Art. 35, 36, 37 and 38 Effective interest rate exceeding the usury rate set by the Central Bank | Art. 35 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital; and/or

• Reimbursement of improperly collected interest Failure to provide consumers with the fee and commission schedule and calculation basis | Art. 36 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Non-compliance with the rule on interest capitalization | Art. 37 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital; and/or
• Regularization of the situation and/or, if applicable, reimbursement of the amount of improperly collected interest

Page 10/12 Failure to inform consumers monthly about interest, fees, or charges debited to their accounts | Art. 37 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital X. OFFENSES RELATED TO MARKETING AND ADVERTISING Art. 39 and 40 Failure to indicate the name, logo, paid-up share capital, and contact details on marketing and advertising documents | Art. 39 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Misleading advertising | Art. 39 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.5% of the mandatory minimum capital; and/or

• Prohibition of the marketing and advertising subject activity Ambiguity and exaggeration in the presentation and content of marketing and advertising documents | Art. 40 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Use of complicated language and terms in the presentation and content of marketing and advertising documents | Art. 40 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Use of marketing and advertising documents with a font size less than 12 points | Art. 40 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 20,000 per displayed document XI. OFFENSES RELATED TO THE HANDLING OF COMPLAINTS AND APPEALS Art. 41 and 43 Absence of a manual for consumer complaint handling procedures | Art. 41 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to display, in a visible and publicly accessible place, a notice explaining the procedures and modalities for handling consumer complaints | Art. 41 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 500,000 Charging fees and commissions to the consumer for filing, processing, and resolving their complaints | Art. 43 | - Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital; and/or
• Immediate restitution of the improperly paid amount

Page 11/12 XII. OFFENSES RELATED TO COMPLAINT HANDLING PROCEDURES Art. 44, 45, 46 and 47 Absence of a dedicated service for handling consumer complaints directed by a competent executive | Art. 44 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Omission of a document designating an employee responsible for receiving and handling consumer complaints at the agency and counter level | Art. 44 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to acknowledge in writing the receipt of a complaint | Art. 45 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 50,000 per complaint Failure to notify the complainant in writing of the decision taken and its reasoning, with a mention indicating that the complainant has the right to appeal to the Central Bank | Art. 45 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 100,000 per complaint Failure to promptly execute any corrective measure taken regarding the complainant | Art. 45 | Disciplinary sanctions against Executives/Managers; and/or monetary sanction of 0.25% of the mandatory minimum capital. Violation of regulatory deadlines in resolving complaints | Art. 46 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 50,000 per day of delay Violation of regulatory deadlines in communicating decisions taken | Art. 46 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 50,000 per day of delay Failure to display, in a visible and publicly accessible place, the complaint resolution procedures | Art. 47 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Failure to display, in a visible and publicly accessible place, the complaint resolution procedures, at least in Kirundi, French, and English | Art. 47 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital

Page 12/12 Display of documents detailing complaint resolution procedures written in a font size less than 12 points | Art. 47 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of BIF 500,000 XIII. OFFENSES RELATED TO THE MAINTENANCE OF REGISTERS AND REPORTS ON COMPLAINTS Art. 48, 49, 50 and 51 Failure to keep the register and electronic file of all complaints up to date | Art. 48 | Disciplinary sanctions against Executives/Managers and/or monetary sanction of 0.25% of the mandatory minimum capital Absence of a register of all consumer complaints and omissions