2009年-世界发展银行全球_Action_Plan_for_Strengthening_Financial_Services_Consumer_Protection_in_Azerbaijan_55页_627kb

Summary of the Action Plan for Strengthening Financial Services Consumer Protection in Azerbaijan

Core Content

The Action Plan for Strengthening Financial Services Consumer Protection in Azerbaijan outlines a comprehensive strategy to enhance consumer rights and financial literacy. It is based on the World Bank's Technical Note from June 2009 and incorporates international best practices in consumer protection. The plan emphasizes the need for legal and regulatory reforms, improved supervision, and greater transparency in financial services.

Main Sections

I. Legal and Regulatory Issues

The Action Plan is structured around five key areas:

• Legal Mandate
• Effective Supervision and Regulation
• Disclosure of Information
• Business Practices
• Dispute Resolution

These areas are based on the recommendations of the Technical Note and aim to ensure that consumer protection is integrated into the financial sector's regulatory framework.

Key Actions and Objectives

A. Legal Mandate

• Action: Define responsibility of financial supervisory authorities for consumer protection

  • Description: Update the legally defined mission of the CBA, SCS, and SISD to include consumer protection as a key priority alongside prudential supervision.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q3 2010

• Action: Prepare communication strategy to announce and explain the new role of supervisory authorities

  • Description: Develop a strategy to communicate the new role of supervisory authorities to the public and the financial sector, highlighting the benefits for both.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q3 2010

• Action: Set the profile of the consumer protection teams

  • Description: Define the role and status of consumer protection teams to ensure they are independent and have a clear reporting line.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q2 2010

• Action: Establish Coordinating Committee for legal and regulatory changes

  • Description: Create a committee to coordinate legal and regulatory changes across all financial sectors.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q2 2010

• Action: Introduce market conduct regulation of non-bank credit providers and analyze options for developing legislation for leasing

  • Description: Include leasing companies in the CBA's supervisory mandate and develop a regulatory framework for non-bank credit providers.
  • Responsibility: CBA (with support from IFC and USAID)
  • Deadline: Q1 2011

• Action: Improve cooperation between market conduct and prudential supervisors

  • Description: Set up coordination processes to ensure market conduct supervision influences prudential supervision and provides early warnings.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q2 2010

• Action: Prepare yearly report on the current state of consumer protection in financial services and plans for improvement

  • Description: Develop a yearly report to be submitted to the President and Parliament, including progress and future plans.
  • Responsibility: CBA, SCS, MOF, Antimonopoly Department, Police, Ministry of Justice
  • Deadline: Q1 2011 and then annually

• Action: Establish informal communication mechanisms with stakeholders

  • Description: Set up quarterly meetings with industry associations and consumer organizations to discuss issues and foster cooperation.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q3 2010 and then quarterly

• Action: Introduce mystery shopping and reporting requirements

  • Description: Use mystery shopping as an official tool for monitoring sales processes and require institutions to report unfair client behavior.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q2 2011

• Action: Require naming the appropriate supervisor in all public communications of financial institutions

  • Description: Mandate that financial institutions state their supervisory authority in all public communications.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Q4 2010

• Action: Build capacity of consumer organizations

  • Description: Educate consumer organizations and media about financial products and rights to enhance their ability to support clients.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Continuously starting from Q3 2010

• Action: Develop international networking

  • Description: Facilitate international exchanges and learning opportunities for officials responsible for consumer protection.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Continuously starting from Q2 2010

B. Disclosure of Information

• Action: Prepare Key Facts Statements

  • Description: Develop standardized Key Facts Statements for all financial products, ensuring they are clear, comparable, and include key warnings.
  • Responsibility: Sector supervisors with involvement of financial and consumer associations
  • Deadline: Q4 2010

• Action: Introduce Key Facts Statements into the laws and supervisory procedures

  • Description: Legally require financial institutions to provide Key Facts Statements to clients before transactions, with approval and monitoring by supervisors.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Law changes by Q4 2010; implementation by Q1 2011

• Action: Introduce a product guide for the use of mortgages

  • Description: Create a guide explaining mortgages in plain language, available in all branches and on bank websites.
  • Responsibility: Azerbaijan Mortgage Fund with support from IFC
  • Deadline: Q2 2010

• Action: Introduce a glossary of insurance terms

  • Description: Develop a glossary to help the public understand technical terms used in insurance products.
  • Responsibility: Azerbaijan Insurers Association with support from IFC
  • Deadline: Q2 2010

• Action: Prepare standardized contract features

  • Description: Develop standardized contract features across all financial products, ensuring clarity and fairness for consumers.
  • Responsibility: Financial and consumer associations
  • Deadline: Q2 2011

• Action: Introduce standardized contract features and the "comply or explain" policy

  • Description: Legally require financial institutions to use standardized contract features and to explain deviations from them.
  • Responsibility: CBA, SCS, MOF
  • Deadline: Law changes by Q2 2011

C. Financial Literacy and Capability

The Action Plan also includes a section on improving financial literacy and capability of the Azerbaijani population. This involves:

• Developing a National Financial Capability Programme
• Conducting a Financial Capability Survey
• Implementing Financial Education in Schools
• Launching Other Financial Capability Initiatives
• Creating a Consumer Communications Strategy
• Conducting Consumer Testing and Monitoring & Evaluation

These actions are aimed at increasing the public's understanding of financial products and their rights, thereby empowering them to make informed decisions.

Key Funding and Implementation Considerations

• Funding Sources: Possible funding sources include government budgets, international organizations (e.g., IFC, USAID), and private sector contributions.
• Procurement Methods: Expected procurement methods include joint cooperation between supervisory bodies, industry associations, and consumer organizations.

Conclusion

The Action Plan provides a roadmap for enhancing consumer protection in Azerbaijan's financial sector through legal reforms, improved supervision, and greater transparency. It emphasizes the importance of coordination among regulatory bodies, consumer organizations, and the financial industry, and highlights the need for continuous monitoring and capacity building. The timeline for implementation is set for the period up to 2011, with some actions continuing annually.