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Financial Institutions
Abandoned Property Holders
The Finanical System in the ECCU
Structure of the system
Clearing Banks
Licensed Finance Companies
International Financial Services Sector Regulators
Registrars/Commissioners of Cooperatives
Insurance Sector Supervisors/National Regulators
Proposed Prudential Guidelines
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Abandoned Property Holders

1.0 SCOPE

This Code of Best Practice proposes basic guiding principles of good banking practice for all licensed financial institutions operating in the Eastern Caribbean Currency Union (ECCU). The Code seeks to facilitate and strengthen the development and maintenance of mutually beneficial relationships between licensed financial institutions and their customers.

The observance of the Code of Best Practice is contingent on full disclosure by both financial institutions and their customers.

The document is not legally binding. However, financial institutions may adopt the Code of Best Practice, in whole or in part, so far as it is relevant to the type of services that are offered and which are covered under this Code.


2.0 OBJECTIVES

The Code of Best Practice is intended to:

2.1   ensure a fair and consistent approach in customer relations and provide minimum standards for          customer care;

2.2   promote full disclosure of information;

2.4   increase customer awareness of their rights and obligations;

2.5   provide for the establishment of complaint resolution procedures, as required under the ECCB          Guidelines on Corporate Governance; and

2.6   promote integrity and confidence in the ECCUís financial system.


3.0 APPLICATION

This Code applies to all licensed financial institutions that provide banking services in the ECCU. The Code applies to all personal customers, including sole traders, partnerships, clubs and other non-profit organisations of licensed financial institutions operating in the ECCU. The Code does not apply to corporate customers. However, financial institutions have the right to expand the application as they see fit.


4.0 BASIC PRINCIPLES OF GOOD BANKING PRACTICE

4.1  Financial institutions in the ECCU should:

4.1.1  Act fairly and reasonably in their dealings with customers by:

4.1.1.1   meeting all the standards in this code in the provision of financial products and services;
4.1.1.2   ensuring that products and services provided adhere to relevant laws and regulations;
4.1.1.3   ensuring secure and reliable banking and payment systems; and
4.1.1.4   considering cases of financial difficulty rationally.

4.1.2  Assist customers in understanding how their financial products and services work by:

4.1.2.1   providing information legibly and in plain English;
4.1.2.2   explaining the financial implications and possible risks of acquiring the product; and
4.1.2.3   helping customers to choose the most appropriate product for their needs.

4.1.3   Be sympathetic when things go wrong and deal expeditiously with errors by:

4.1.3.1   correcting mistakes quickly;
4.1.3.2   handling complaints within a reasonable period of time;
4.1.3.3   cancelling any bank charges that were applied as a result of the bankís error.

4.2  Customers should:

4.2.1   Co-operate with financial institutions in the provision of personalinformation to facilitate the
            conduct of proper due diligence by providing:


4.2.1.1   accurate information within a reasonable time upon request;
4.2.1.2   supporting documentation where necessary.

5.0 DISCLOSURES

5.1 Bank Fees and Charges

Financial institutions in the ECCU should provide customers with details of any charges for the day-to-day operations of their accounts.

5.1.1   Customers should be given, at the start of the business relationship and upon request, details             of the day-to-day charges which apply to their particular account.

5.1.2   An up-to-date list of all fees and charges should be publicly displayed in the banking hall and/or             on the bankís website for all customers and prospective customers of a financial institution.

5.1.3   If charges are increased or new charges introduced, customers should be personally informed             at least 30 days prior to the change being implemented, for example on monthly/quarterly             account statements or otherwise.

5.1.4   Customers should be provided with details of any charges for using automated teller machines             (ATM) whenever an ATM card is issued or re-issued.

5.1.5   Information on all ATM transaction charges should be made available to customers either on-            screen before they proceed with a transaction or by displays in the ATM. The customer should             also be informed of possible transaction charges by the card issuer.

5.1.6   Charges levied for the use of ATMs should be clearly shown on the customerís account             statement.


5.2 Operating an Account

The following represents the minimum obligations of financial institutions for the operation of accounts:

5.2.1   Customers should be informed of the current interest rates and the method of calculating             interest on their account before the account is opened. Where applicable, any changes should             be disclosed at least 30 days in advance to allow the customer sufficient time to make             alternative arrangements, if necessary before the introduction of the change.

5.2.2   For term deposit accounts, customers should be provided with complete deposit agreements             which should, at a minimum, provide details of the method of payment of interest, the treatment             of the account at maturity and penalties.

5.2.3   Where appropriate for the type of account, customers should be provided with regular             (monthly/quarterly) account statements to assist with the management of their accounts and             the review of entries made to the accounts.

5.2.4   Where relevant, all account statements should include, at a minimum:
            a) the current interest rate;
            b) the varying rates charged on an outstanding balance, a transferred balance, new borrowings                  and cash advances;
            c) minimum monthly payment and payment due date;
            d) transaction details, including cash advance.

5.2.5   Customers should be informed of the clearing cycle including when funds can be withdrawn             after being deposited to an account.

5.2.6   Financial institutions should keep original cheques or copies of transactions on customer             accounts, in accordance with the requirements of the anti-money laundering legislation and/or             the Evidence Act for the respective territory.

5.2.7   When a customer informs a commercial bank that a cheque book, passbook, ATM card, debit             or credit card has been lost or stolen, or that the security of an account may have been             compromised in any way, the bank should take immediate steps to prevent illegal usage.

The following represents the minimum obligations of customers with operating accounts at financial institutions:

5.2.8   Customers should inform financial institutions of changes to personal information as soon as             possible. Examples of changes in information include changes to name, physical address,             mailing address, and contact numbers.

5.2.9   Customers should, within a reasonable time upon receipt, review account statements and alert             financial institutions of any discrepancies or irregularities as soon as possible.


5.3 Terms and Conditions of Products and Services

5.3.1   Customers who accept a product or service for the first time should be provided with details of             all the relevant terms and conditions of the product or service requested. Customers should be             required to sign at least one document, which comprehensively outlines all the terms and             conditions relating to the product or service of his/her choice, in agreement or acceptance of             these terms and conditions. These terms and conditions should be written in plain language             with the use of legal or technical language, only where necessary.

5.3.2   The written terms and conditions should clearly state the customerís rights and responsibilities             in relation to the product or service selected.

5.3.3   Financial institutions should, where necessary, inform customers that they may seek             independent legal advice with regard to the terms and conditions being committed to.

5.3.4   Financial institutions reserve the right to change the terms and conditions, where applicable             and inform customers accordingly.


5.4 Foreign Exchange Services

Financial institutions should:

5.4.1   Provide customers with a full description of the service, as well as explanations of all foreign             exchange transactions charges and publicly display details of exchange rates;

5.4.2   Inform customers of the expected timeframe for the delivery of funds to the beneficiary; and

5.4.3   Inform customers of the original amount received and any charges applied whenever funds are             transferred to customersí accounts from abroad.


5.5 Lending

5.5.1   Financial institutions should adequately assess customersí ability to repay before increasing             overdraft, credit card limits or other borrowings so as not to financially overburden a customer.             This assessment should include a review of the customerís income, financial commitments             and creditworthiness.

5.5.2   Financial institutions should provide timely and accurate disclosure of terms, costs, rights and             liabilities with regard to loan transactions. Each facility provided should specify at a minimum             the repayment terms, total amount of the loan, loan fees, interest rate, collateral, conditions of             early repayment and procedures if the customer fails or repeatedly fails to meet his/her             obligations under the agreement.


5.6 Advertising and Marketing

5.6.1   In accordance with Section 25 (1) of the Banking Act, financial institutions should ensure that all             advertising and promotional material is not misleading.


6.0 PROTECTING CUSTOMER INFORMATION

6.1      Financial institutions should treat customer information as private and confidential (even when             they are no longer customers of the bank).

6.2      Financial institutions should not reveal the name, address or details about customer accounts             to any third party, except where the information is required by law and/or the customer requests             this, in writing.


7.0 COMPLIANT HANDLING PROCEDURES

7.1     Financial institutions should inform prospective customers of the availability of procedures for            handling complaints.

7.2     If a customer wishes to make a complaint, the financial institution should provide information on            how this can be done and the means of recourse if the customer is not pleased with the            outcome.

7.3     Financial institutions should:

7.3.1   send a written acknowledgement, within five (5) working days of receiving a complaint;

7.3.2   write to the customer again, within four (4) weeks, with a final response or to explain the             reasons for not providing a response, if more time is required;

7.3.3   send a final response within eight (8) weeks and advise the customer of the procedures for             taking the complaint further if he/she is not satisfied with the outcome.


8.0 IMPLEMENTATION OF THE CODE OF BEST PRACTICE

8.1     Financial institutions agree to adopt the Code of Best Practice and inform their customers            accordingly through publication on the institutionís website, the use of brochures, flyers and/or            any other appropriate media.

8.2     Financial institutions should provide a copy of the standard Code of Best Practice to all bank            staff and provide the necessary training to facilitate the implementation of the principles of the            Code.


EASTERN CARIBBEAN CENTRAL BANK
FEBRUARY 2008


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