Mozambique’s Banking Sector Gets a Tight Leash: Compliance Procedures in Place to Protect Financial Consumers

The Banco de Moçambique (BM) has taken a firm stance on ensuring the highest standards of market conduct among credit institutions, financial companies, and other entities under its supervision. The institution is working tirelessly to protect financial consumers and promote financial education and literacy.

Compliance Procedures

To achieve this goal, the BM lays down strict rules for conduct that all supervised entities must adhere to when operating in the market. These regulations are outlined in Notices and Circulars, which are based on the provisions of Law no. 20/2020, the Law on Credit Institutions and Financial Companies.

Regular Inspections

But how does the BM ensure compliance? The institution conducts regular inspections of credit institutions, financial companies, and microfinance operators to identify any irregularities or non-compliance with regulations. If such issues are found, the affected entity is required to correct them promptly, without exception.

• Key aspects of supervised entities’ operations are overseen, including:
  • Pricing
  • Advertising
  • Contractual terms and conditions for financial products and services

Price Regulation

For instance, when credit institutions or financial companies intend to introduce or change the price of a particular financial product or service, they must submit their proposals to the BM for approval.

• Advertisements for these products and services are subject to scrutiny by the institution to ensure compliance with information and transparency duties.

Contractual Terms and Conditions

Furthermore, the BM ensures that contractual terms and conditions for financial products and services comply with applicable legal and regulatory standards, such as:

+ Duties of information
+ Transparency
+ Non-discrimination
+ Balance of interests between parties

Promoting Transparency and Accountability

The move is seen as a major step forward in promoting transparency and accountability in Mozambique’s banking sector. By implementing these compliance procedures, the BM aims to create a level playing field for all financial institutions, ultimately benefiting financial consumers and the economy as a whole.