Procedure for Conducting Inspections of Credit Financial Organizations in the Field of Consumer Financial Services Rights Protection

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Approved by the Resolution of the Board of the National Bank of Tajikistan of "21" June 2022 No. 78 Procedure for Conducting Inspections of Credit Financial Organizations in the Field of Protection of Consumer Financial Services Rights The Procedure for Conducting Inspections of Credit Financial Organizations in the Field of Protection of Consumer Financial Services Rights (hereinafter - the Procedure) regulates the process of verifying compliance with the protection of rights and interests of consumers of financial services in credit financial organizations in accordance with legislation during inspections carried out in accordance with the Procedure for Conducting Inspections of Credit Financial Organizations, summarizing and presenting results, approved by the Resolution of the Board of the National Bank of Tajikistan dated 30.01.2014, No. 13 (hereinafter - the inspection), and establishes the scope of actions of authorized employees of the Department of Protection of Consumer Financial Services Rights of the National Bank of Tajikistan in the process of conducting inspections, and special requirements for conducting inspections, sequence in inspection deadlines, summarizing and providing their results.

CHAPTER 1. GENERAL PROVISIONS

1. The inspection is carried out by authorized employees of the responsible structural unit of the National Bank of Tajikistan - the Department of Protection of Consumer Financial Services Rights (hereinafter - the Department) as part of the inspection group of the National Bank of Tajikistan or, if necessary, independently.
2. The main goal of the inspection is:

• control of compliance with the banking legislation of the Republic of Tajikistan, regulatory legal acts of the National Bank of Tajikistan and other regulatory legal acts of the Republic of Tajikistan in the field of protection of consumer financial services rights by credit financial organizations;
• identification of possible risks and ensuring the necessary level of protection of the interests of consumers of financial services arising as a result of the activities of credit financial organizations, which concern the violation of the rights of consumers of financial services and assessment of their possible impact on the activities of credit financial organizations;
• strengthening the trust of consumers of financial services in the banking system.

CHAPTER 2. DIRECTIONS FOR CONDUCTING INSPECTIONS
3. The inspection includes the following directions regarding compliance with legislation:

• inspection of disclosure of information on provided financial services;
• inspection of the quality of service for consumers of financial services;
• inspection of the process of considering complaints and disputes;
• inspection of compliance with requirements regarding published information of credit financial organizations;
• inspection of the internal control process of credit financial organizations for compliance with legislation on the protection of financial services.

4. The process of inspecting the disclosure of information on provided financial services includes:

• inspection of the disclosure of information about banking system services to consumers of financial services;
• inspection of the names of financial services, conditions (rules) and the procedure for their changes;
• inspection of pricing for services provided by credit financial organizations (including commission fees and other payments), processes of their formation, conditions and procedure for their changes;
• inspection of each type of contract concluded for the provision of services, its content and the information included in it.

5. Inspection of the quality of service for consumers of financial services includes:

• inspection of the procedure, conditions and forms of maintaining contact with consumers of financial services;
• inspection of information provided to consumers of financial services directly during their service, inspection of the principles of providing such information;
• inspection of the qualifications of service personnel;
• inspection of compliance with mandatory actions carried out by personnel of credit financial organizations when carrying out banking operations with consumers;
• inspection of other issues related to the provision of services.

6. Inspection of the process of considering complaints and disputes includes:

• inspection of the complaint acceptance process;
• inspection of the complaint and dispute resolution process;
• inspection of the process of notifying consumers of financial services about the results of complaint and dispute resolution;
• inspection of the registration and accounting of complaints and disputes.

7. Inspection of compliance with requirements regarding published information by credit financial organizations includes:

• inspection of the accuracy of published information (information directories, brochures, booklets, leaflets, posted on notice boards, prospectuses, posters, announcements, light boards and other technical means) about services provided by the credit financial organization;
• inspection of information published in electronic mass media (internet sites, social networks);
• inspection of the accuracy of other information intended for the general public;
• identification of cases of providing consumers of financial services with false information.

8. Inspection of the internal control process of credit financial organizations for compliance with legislation in the field of protection of consumer financial services rights in practice and in economic activity includes:

• inspection of the presence of appropriate policies and procedures (processes);
• inspection of the proper application of policies and procedures (processes) to determine their correspondence to the practical activities of credit financial organizations.

9. Inspections specified in paragraphs 3-8 of this Procedure are carried out for the purpose of:

• identifying violations of the rights of consumers of financial services arising as a result of the practical activities of credit financial organizations, from the point of view of compliance with current laws and preserving trust in the banking system, as well as assessing their possible impact on the activities of credit financial organizations;
• checking the compliance of the actual activities of credit financial organizations with the requirements of legislation and other regulatory legal acts in the field of protection of the interests of consumers of financial services.

10. Inspections are conducted by the Department within the framework of annual inspections of credit financial organizations jointly with employees of other structural units of the National Bank of Tajikistan (planned inspections) or, if necessary, ad-hoc (thematic) inspections directly conducted by the Department.
11. Planned inspection of credit financial organizations is conducted no less than once a year by authorized representatives (employees) of the Department.
12. Ad-hoc (thematic) inspection is conducted by order of the Chairman of the National Bank of Tajikistan or his deputy, supervising the department, in the following cases:

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• based on the analysis of appeals of consumers of financial services received by the National Bank of Tajikistan;
• by order of the management of the National Bank of Tajikistan;
• based on a request from law enforcement agencies.

CHAPTER 3. SPECIAL REQUIREMENTS FOR PREPARATION FOR INSPECTION
13. Preparation for conducting inspections of credit financial organizations is carried out based on information available in the National Bank of Tajikistan to clarify issues subject to inspection, the inspection period, and to determine the volume of the sample of documents (information) necessary for conducting inspections.
14. The following information and documents are used to organize and carry out the inspection process:

• organizational and administrative documentation, instructions, rules, regulations, regulations and other internal documents of credit financial organizations;
• information published by credit financial organizations (internet sites, links in social networks, printed materials, brochures, booklets, etc.);
• list of contracts with persons related to the credit financial organization and its employees, including their terms;
• reports published by credit financial organizations;
• typical examples of transactions and contracts concluded between the credit financial organization and consumers of financial services (credit, Islamic financing, savings/deposit/Islamic deposit contracts and others);
• rules approved for services provided by the credit financial organization;
• written correspondence between the National Bank of Tajikistan and the inspected credit financial organization after its comprehensive inspection, in particular documents concerning existing problems in the organization and ways to solve them, as well as urgent corrective measures and impact measures applied by the National Bank of Tajikistan;
• results of the last and previous inspections of the credit financial organization in the field of protection of consumer financial services rights, as well as results of the implementation of recommendations presented after the completion of the last inspection;
• information on the elimination of cases of violations and shortcomings identified during previous inspections;
• complaints sent to the credit financial organization after its last inspection, as well as to the National Bank of Tajikistan;
• other documents of importance to the inspectors.

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15. Inspectors may make copies of documents of the inspected credit financial organization.
16. Confidentiality of information relating to state, banking, commercial and other secrets, as well as information whose disclosure is prohibited by legislation, is ensured during the inspection.
17. Upon completion of the inspection, all documents and technical equipment requested for the purpose of the inspection are returned.
18. During the inspection of a credit financial organization, information necessary for carrying out regulatory and supervisory functions over the activities of the credit financial organization in terms of compliance with the rights and interests of consumers of financial services is collected. Information obtained during the inspection is the basis for compiling an assessment and conclusions about the overall state, or about individual areas of activity of the credit financial organization. Also, information about circumstances identified in the organization's activities may become the basis for applying measures provided for by legislation, including:

• cases of non-compliance with legislation, regulatory legal acts and directives of the National Bank of Tajikistan, failure to provide information, or provision of incomplete or inaccurate information by credit financial organizations;
• circumstances of the activities of credit financial organizations, actions (inaction) of their employees or management bodies, not violating the legislation of the Republic of Tajikistan, regulatory legal acts of the National Bank of Tajikistan, but negatively affecting, or capable of negatively affecting the rights of consumers of financial services or creating prerequisites for the emergence of violations and additional risks.

19. The inspection begins from the moment of submitting the order to the head of the inspection group according to the standard form of Appendix No. 1 to the Procedure for Conducting Inspections of Credit Financial Organizations, summarizing and presenting its results, approved by the Resolution of the Board of the National Bank of Tajikistan No. 13, dated 30.01.2014, and ends after the submission of the inspection act.
20. The term of inspection of credit financial organizations, depending on the number of its branches and structural units, may be set up to 21 calendar days. In exceptional cases, it may be additionally extended by 10 calendar days.

CHAPTER 4. SPECIAL REQUIREMENTS FOR DOCUMENTING INSPECTION RESULTS
21. The inspection act is a document containing information of limited access for third parties, except for cases provided for by the legislation of the Republic of Tajikistan and regulatory legal acts of the National Bank of Tajikistan, which is drawn up in two copies in the case of conducting an ad-hoc (thematic) inspection and in three copies when conducting a planned inspection according to Appendix No. 1 of this Procedure, the standard form of which is approved. The inspection act reflects a real assessment of the credit financial organization in accordance with the legislation of the Republic of Tajikistan.
22. The inspection act consists of the following parts:

• introductory part;
• on the disclosure of information on provided financial services;
• on the quality of service for consumers of financial services;
• on the process of resolving complaints and disputes;
• on compliance with requirements for the publication of information;
• on the identification of violations and shortcomings in the part of protecting the rights of consumers of financial services;
• conclusions and proposals.

23. The introductory part of the inspection act includes the following information:

• date and number of the order of the National Bank of Tajikistan on conducting an inspection in a credit financial organization;
• date of start and end of the inspection;
• inspected areas of activity of the credit financial organization;
• confirmation of the fact that the inspection results were discussed with representatives of the credit financial organization (indicating the full names of representatives participating in this discussion);
• reminder that the information contained in the inspection act is considered banking, official or commercial secret, which may be transferred to third parties exclusively on the basis and in the manner established by legislation;
• in case if problems are identified in the credit financial organization, it is noted that it is under special control of the inspection group.

24. In the section of the inspection act on the disclosure of information on provided services, violations, problems and shortcomings identified during the inspection of the disclosure of information on the conditions of services provided by the credit financial organization, forms of contracts, as well as the information included in them, the causes of their occurrence and impact on the state of the credit financial organization are detailed.
25. In the section of the inspection act on the quality of service for clients, violations, problems and shortcomings, compliance with the requirements of the communication order with clients, information directly provided to consumers of financial services, business behavior of personnel and the general level of service, causes of their occurrence and impact on the current state of the organization are detailed.

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26. In the section of the inspection act on the process of considering complaints and resolving disputes, violations, problems and shortcomings identified during the acceptance and consideration of consumer complaints and disputes, ways to resolve them, decision-making, notifying consumers of their results and the entire process of complaint consideration as a whole, causes of their occurrence and impact on the current state of the organization are detailed.
27. In the section of the inspection act on compliance with requirements for the publication of information, violations, problems and shortcomings identified during the inspection of the accuracy of information directories, booklets, brochures, catalogs, posters, light boards and other technical means, with the help of which information is provided to consumers of financial services, as well as the causes of their occurrence and impact on the state of the credit financial organization are detailed.
28. In the section of the inspection act on the identification of cases of violations and shortcomings in the field of protection of consumer financial services rights, information is provided about violations of the provisions of laws and other regulatory legal acts of the Republic of Tajikistan, discovered as a result of the inspection, indicating the article and violated point of the regulatory legal act, the date of the violation and its description. In this section of the inspection act, all the most important problems, weaknesses of the credit financial organization, areas with a high level of risk and other shortcomings that are not violations of the provisions of laws and other regulatory legal acts, but, in the justified opinion of the inspection group, may harm the interests of consumers of financial services are presented. In the absence of violations and shortcomings in this section of the inspection act, it is indicated "As a result of the inspection, no violations and shortcomings were detected".
29. In the section of the inspection act on conclusions and proposals, conclusions made based on the inspection results, identified problems and shortcomings, as well as a brief description of the situation in the credit financial organization regarding business behavior and protection of consumer interests are summarized.
This section also indicates the main proposals of the inspectors aimed at correcting existing problems, on the principle of priority depending on their degree of importance. The proposals of the inspectors should primarily concern weak, vulnerable and problematic areas of activity of credit financial organizations.
30. All other conclusions and proposals not presented in other sections of the inspection act must be reflected in the conclusions and proposals section of the inspection act.

Appendix No. 1 to the Procedure for Conducting Inspections of Credit Financial Organizations in the Field of Protection of Consumer Financial Services Rights
INSPECTION ACT OF A CREDIT FINANCIAL ORGANIZATION IN THE FIELD OF PROTECTION OF CONSUMER FINANCIAL SERVICES RIGHTS (standard form) NATIONAL BANK OF TAJIKISTAN For Official Use Only Copy No. ___________ ACT _____________________________________________________________________________ ____________________________________________________________________________ (official name of the credit financial organization) Date of act preparation: "" "" 20 year, Registration number (No.) ___________ Place of act preparation:__________________________________________________ Start of inspection: «» «» 20 year. Completion of inspection: «» «» 20 year. This act is drawn up based on the results of the inspection of ____________________ (official name of the credit financial organization), conducted in accordance with the Order for conducting inspection No. ___ from «» 20 year. The inspection act (introductory, analytical, concluding parts and all proposals, structure and content of the inspection act are determined in accordance with the Procedure for Conducting Inspections of Credit Financial Organizations in the Field of Protection of Consumer Financial Services Rights and other regulatory legal acts of the National Bank of Tajikistan. Attachments to the inspection act: on ___ sheets. (indicating the list of attached documents (their copies)) This act is drawn up in two/three copies having equal legal force. Inspector

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(signature)

(Full Name)

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National Bank of Tajikistan
(territorial branch of the National Bank of Tajikistan) Familiarized with the inspection act of the credit financial organization, its branches and structural units:
«___» ______________________ 20.. year.
Head of the credit financial organization (branch or its structural units) M.P. ________________________(position) (Full Name) (signature) Objections to the inspection act are attached to «».
In the case of conducting an inspection of a credit financial organization, its branches and structural units on issues of their activities, written explanations of the responsible employee of the credit financial organization, its branch and structural units may be attached to the act, indicating his last name, first name, patronymic, position, as well as the date of submission to the head of the inspection group.