Tanzania: Train staff to guard sector`s integrity, bankers told

Bankers in East Africa have been told to seriously address the issue of staff training, particularly on professional ethics, in order to guard the integrity of the sector.

This was revealed Friday by Felix Kibodya, head of legal department, National Bank of Commerce (T) Limited at the just ended 11th East Africa Banking School meeting hosted by the Tanzania Institute of Bankers (TIB).

He said at present unenforceable codes of professional ethics have been cited as a key factor hindering banks and financial institutions within the region.

Besides, he said, the majority of staff don’t understand the code of professional ethics in the banking industry.

Lack of training on professional ethics has resulted in some banking staff failing to comply with the professional ethics or follow procedures required by the code of conduct.

There is need for banks and financial institutions to enforce professional ethics by training their staff so that they can act fairly, reasonably, transparently, honestly and even confidentially.

Emphasising on integrity, he said, it encompasses the vouching of moral values in an individual when they discharge their duties.

He added that this also ensures that customers are treated fairly, transparently and equally and it will also imply that self interest will be avoided at any cost.

In addition to lack of training, weak legal framework and institutions to investigate and prosecute financial crimes, lack of vetting facility, inefficient judicial system, lack of inadequate training facilities on banking products as well as replacement of manual process with IT have been cited as key factors that hinder bankers to operate more efficiently and effectively.

“As we all know, the banking sector is the engine of economic growth and it is a link sector due to the intermediation role that the banks play in an economy,” he observed.

Subsequently, he said, banks are perceived to be repository of public confidence, and it is against this backdrop, professional ethical standards for bankers evolved.

Speaking on the position of the developed countries, he said, professional ethics for bankers in those countries especially in the US and Europe partake a very different dimension.

“For instance, in the US, each state has prescribed a detailed code of professional ethics for bankers and there are different codes for mortgage, investment bankers and leasing bankers,” he said.

Apart from that the existence of different codes is attributed to the fact that banks in the US are highly specialized.

In the OECD countries, on the other hands the regulatory regime considers professional ethics as one of the aspects that require regulatory intervention, he said.

Also model codes founded on renowned practices have been developed and are readily available off the shelf, he added.

He also noted that the global trend as regards the practice of banking has reshaped the platform upon which “we can refine professional ethics for bankers.”

“The starting point is for bankers in the region to re-assess the way we view the banking profession in the light of the changed business environment. Against this background, our professional training institutions must consider to reposition themselves in terms of the contents of the programmes they offer,” he said.

Professional codes cannot be sanctioned by mere moral situation, he said, adding, “we need an effective enforcement mechanism and the respective central banks can offer the support needed by including professional ethics in the regulatory framework.”

Also bankers associations in the region should harmonise their codes and endeavour to maintain databases of their professional including those who have caused harm to the trade.

SOURCE: THE GUARDIAN