Central Bank of Barbados Issues Market Conduct Guideline for Financial Institutions

The Central Bank of Barbados has issued a market conduct guideline for all entities it regulates. The guideline will also extend to future recognised entities such as digital currency operators and fintech companies.

The guideline, which went into effect on July 12, 2024, details how these entities should carry out several aspects of their operations, including implementing fees and charges, opening and closing accounts, handling complaints, and ensuring that vulnerable groups have access to financial services.

Speaking during an event to introduce the guideline, Central Bank Governor Dr. Kevin Greenidge described the guideline as "necessary to ensure the financial system remains stable, it remains transparent, and it remains fair for all players involved."

Senior Director, Bank Supervision, Cheryl Greenidge, noted that a number of the behaviours included in the guideline were already being practised by several financial institutions, but the Bank believed it was important to codify them to ensure Barbadians enjoy a consistent experience regardless of where they conduct their financial affairs.

Among the key aspects of the guideline is the process for banks and deposit-taking finance companies to institute new or increased fees. They must first request a non-objection from the Central Bank, and provide "a detailed rationale for the proposal, the impact on the licensee's customers, together with any other supporting documentation" no less than 60 days before they propose to implement it. Should they receive a non-objection, they must then notify their customers at least 30 days before the fee goes into effect.

The guideline also outlines steps for making access to financial services easier for Barbadians with disabilities and other vulnerable groups, stating "licensees must ensure that all physical and digital banking facilities are accessible to everyone, regardless of age, disability, or economic status. This includes adequate signage, ramps, tactile guides, audio systems, wheelchair accessibility and digital interfaces that accommodate various disabilities."

It also notes that in addition to all commercial banks being required to offer at least one no-fee account, they should also offer tailored, low fee accounts for vulnerable groups such as pensioners, minors, and students.

As relates to onboarding new customers, the guideline instructs commercial banks and deposit-taking finance companies to streamline the process by using the risk-based approach that is permitted in the Central Bank's Anti-Money-Laundering and Combatting the Financing of Terrorism (AML/CFT) Guideline. It also states that these financial institutions should process the application and inform the potential client of their decision within three to five business days or, where that is not possible, provide the applicant with an update as well as estimated timelines for the decision.

With regard to closing accounts, the guideline mandates that "licensees must notify the customer in writing at least 30 days in advance, explaining the reasons for the closure and outlining any possible actions the customer can take to prevent it." However, these, and other instructions related to account closures as well as opening denials, do not apply when they would contravene the financial institution's obligations under the Money Laundering and Financing of Terrorism (Prevention and Control) Act and the AML/CFT Guideline.

The issue of customer complaints is addressed in the guideline, which states that "licensees must have a robust internal dispute resolution (IDR) mechanism that is easy to access, free of charge to the customer, and capable of resolving complaints in a fair, timely, and effective manner." It also speaks to the channels through which customers should be able to lodge a complaint, and outlines what recourse customers have when a complaint is not handled to their satisfaction.

Market Conduct Guidelines - July 2024