WB proposes ombudsman for financial sector
CONSUMERS of financial services should have access to a single financial services ombudsman independent and autonomous of the regulator, the World Bank has proposed.
The establishment of an independent and autonomous ombudsman would allow the consumers to seek redress on complaints. An independent financial service ombudsman makes sure that conflicts between financial institutions and customers are investigated, mediated and adjudicated fairly within a statutory framework.
Ros Grady, a senior financial sector specialist with the World Bank, said last week that apart from protecting consumers of the financial services, the ombudsman would provide financial institutions with consistent professional help and clear them of unfair charges.
This would make the country attractive and enhance its reputation on the international financial markets.
Grady said it was essential to have a dedicated dispute resolution provider for consumers of financial services.
“Most countries have a third party dispute resolution mechanism in place. Therefore, Zimbabwe should consider developing a single financial services ombudsman,” said Grady.
The proposal follows findings from the World Bank’s recent survey on consumer protection and financial literacy.
The decision to establish financial ombudsman service is usually taken by government or the central bank.
The World Bank also advised government to overhaul the country’s consumer protection laws and promote financial literacy.
The advice comes at a time when government has since crafted a Consumer Protection Bill, which is expected to shield the long suffering public from errant pricing and other misdemeanours on the market.
The World Bank report titled ‘Zimbabwe: Diagnosis review of consumer protection and financial literacy’ launched last week said government should implement reforms in the banking, insurance and capital markets to strengthen consumer protection bodies.
The report contains findings and recommendations from a World Bank mission to Zimbabwe between July 14 and July 25, 2014.
The World Bank also said the financial services sector should improve on minimum disclosures.
It argued that Zimbabwe should put in place effective and coordinated institutional, legal and regulatory framework for consumer protection and financial literacy to increase access to financial services and raise the quality of service provision.
“Zimbabwe does not have a co-ordinated financial literacy strategy and no assessment has been made of financial capability levels,” said Grady.