Statutory Business Conduct Requirements in Mozambique: A Review of the Current Framework

Mozambique’s banking sector is governed by various laws and regulations, which has led to a recent review highlighting the need for stronger statutory business conduct requirements. This article will delve into the current framework, exploring the powers granted to consumer associations, obligations of the State and Local Municipalities, and recommendations for strengthening institutional arrangements.

Consumer Associations: Powers and Obligations

Under Chapter VI of Law 15/99, the Commercial Code, Law 22/09, Notice 5/2009, and other laws, consumer associations have been granted significant powers to operate at both national and local levels. These associations focus on protecting consumer rights in general or specific areas, such as goods and services.

State and Local Municipalities: Obligations

The State and Local Municipalities are entrusted with several obligations to support consumer associations, including:

• Approving norms and regulations under Law 22/09
• Preparing effective technical standards
• Ensuring consumers have access to justice and courts
• Creating consumer education centers or services
• Developing national, accessible digital records on consumer rights
• Implementing consumer training and education programs

Strengthening Institutional Arrangements

Despite these obligations, concerns arise that these rights and responsibilities are not being fully honored. To address this issue, it is recommended that institutional arrangements be strengthened to improve the capacity of the Bank of Mozambique (BdM) to monitor and enforce business conduct standards in the banking sector.

Proposed Solutions

• Establish a new financial consumer protection unit within the BdM to oversee consumer protection provisions and handle complaints.
• Strengthen the roles of the Banking Supervision Department (BSD) and the Financial Literacy Program (GPI) in charge of financial education and consumer complaints by designating teams to focus on financial consumer protection.
• Build capacity of GPI team responsible for consumer complaints and financial education through training and increased resources.
• Establish a consumer protection and business conduct task force consisting of Heads of Department of GPI and BSD, as well as GPI staff responsible for financial consumer protection and representatives of BSD.

Conclusion

A review of the current framework highlights the need for stronger statutory business conduct requirements in Mozambique’s banking sector. By strengthening institutional arrangements, consumer associations can better protect consumers’ rights, and the State and Local Municipalities can fulfill their obligations to support these efforts.