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Lesotho’s Financial Institutions Boost Security Measures

The Central Bank of Lesotho (CBL) has announced significant enhancements to its financial institution security measures, aimed at safeguarding the overall stability and soundness of the country’s financial system.

Background

According to the CBL’s Act 2000, the bank is mandated to achieve and maintain price stability, as well as foster a stable market-based financial system. To achieve this, the Bank Supervision and Financial Stability Department has implemented a range of measures, including the deployment of micro and macro-prudential supervisory instruments.

Banking Supervision Unit

The department’s Banking Supervision Unit oversees the country’s banking sector, ensuring that financial institutions comply with relevant laws and regulations. The unit conducts regular on-site and off-site examinations to monitor market conduct and identify potential risks.

Key Responsibilities

  • Conducts regular on-site and off-site examinations
  • Monitors market conduct
  • Identifies potential risks

Financial Consumer Protection Unit

Established in 2018, the Financial Consumer Protection Unit was set up to protect consumers from unfair or abusive practices by financial service providers (FSPs). The unit is responsible for:

Key Responsibilities

  • Supervising market conduct
  • Handling complaints
  • Developing policy frameworks
  • Engaging in financial education campaigns

Financial Stability Division

The CBL’s Financial Stability Division focuses on safeguarding the entire financial sector system stability, disseminating information about potential risks to policymakers, financial institutions, and the general public. The division also provides recommendations on regulations and policies that may limit risks and coordinates the resolution of financial institutions in an efficient manner.

Key Responsibilities

  • Safeguards financial sector system stability
  • Disseminates information about potential risks
  • Provides recommendations on regulations and policies
  • Coordinates the resolution of financial institutions

Conclusion

In a bid to strengthen its financial sector, Lesotho’s Central Bank has announced significant enhancements to its security measures. The bank’s Banking Supervision Unit will conduct regular on-site and off-site examinations to monitor market conduct and identify potential risks.