PRACTICES OF CUSTOMER PROTECTION IN FINANCIAL INSTITUTIONS: THE CASE OF SELECTED PRIVATE COMMERCIAL BANKS

Abstract

The trends of customer protection are not well practiced in many countries including Ethiopia especially in the area of financial supervisory organ and voluntary association. Thus, this thesis explores the extent of the practice of customer protection in financial institutions in the case of selected private commercial banks (AIB, CBO, and BIB). Data were collected through questionnaires from randomly selected customers; and interview from supervisory organs of the financial institutions, representatives of the above three private banks, authority of TCCP, and representative of EBA. Secondary data were also utilized to explore the current practice of customer protection in the industry. Out of 390 questionnaires distributed 384 of them were collected. Thus, the researcher has analyzed the questionnaires and the interviews to generate the findings of the research. The findings include the practice of customers’ protection in the banking business from the general principles point of view is found in a persuasive status, yet there is no comprehensive directive of the topic by NBE which refer to customer protection in banking business, and the performance of EBA regarding developing and implement banking code is inadequate. Accordingly, the study finally recommendations that the supervisory organ of the financial institutions should develop code for customers protection, at the same time banks should have to include the concept of customer protection in their operational procedure and also utilize different electronic-media (programs) to develop awareness and skills of customers to use their rights, and the last but not the least Ethiopian bankers Association has got to bring its final draft of banking code and standards to effect.