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CODE OF CONDUCT THE FINANCE HOUSES ASSOCIATION OF SRI LANKA
This Code of Conduct has been adopted by The Finance Houses Association of Sri Lanka (FHA) as a Regulation framed by its Board of Directors, and as such, is binding on all employees of the member Companies. This Code of Conduct adopted by ‘The Finance Houses Association of Sri Lanka’ to ensure that the highest levels of professionalism, ethical conduct and good governance are observed by all the member companies operating in the Republic of Sri Lanka and their employees; binds its member companies and their employees to total compliance as a condition of its membership.
The member companies and their managements are bound to maintain the highest standards of Good Governance in the conduct of all their strategic and business operations through the adoption of
Comply with all current regulatory and legal requirements, and endeavor to follow best industry practices.
Ethical practices in recruiting employees from other member Registered Finance Companies.
Ethical practices, avoiding unfair business practices in competing with other members of Registered Finance companies;
Ensure adoption of ethical advertising norms not damaging or adverse to competitors in the market.
Customer Services
Ensure in adhering to the Financial Customer Protection Framework issued by the Central Bank of Sri Lanka.
Ensure transparency, in the explicit and implicit meanings of all promotional literature in regard to terms and conditions of lending, recovery procedures, and the levy and imposition of interest rates for regular recoveries as well as default recoveries.
Prepare ‘Pro-Forma Specimen’ copies of all contracts, and other assignment documents used for the sale of all financial products, in all three languages- Sinhala, Tamil and English; and make such material available to customers, prior to they being called upon to sign such documents.
Ensure the use of lucid, easy-to-understand plain and common idiom, in all correspondence, whether such be in SINHALA, TAMIL, or ENGLISH.
Ensure that all reasonable information on all financial products is made available to customers in all three languages when such information is sought.
Where customers seek/request information.
Comply with Statutory Requirements concerning the supply of information, and furnish all other reasonable requests for information.
Assist customers seeking advice and guidance,
Establish the credit worthiness of borrowers to ensure their repayment capacity, especially in dealing with Micro Finance sector borrowers.
Ensure that the customer is given a clear understanding of their financial obligations arising from entering into a financial contract with the Company.
Ensure that a set of ‘Transparent and Credible Guidelines’ for the disposal and adjudication of customer complaints is adopted by the Company, and such guidelines are given due publicity and made available to the public.
Provide credible guarantees that customers will not be intimidated, and subject to victimization, harassment, for lodging complaints and resort to extrajudicial methods of recovery.
Complaints referred back to a Finance Company by the Financial Ombudsman shall be dealt with expeditiously.
Projecting the Finance Industry Image
To protect, promote, and advance, the image, standing, and common interest of Finance Companies in Sri Lanka; and to conduct all its business with integrity and responsibility.
Remain a Trusted and Recognized Contributor to the Sri Lanka Economy and Society at large.
To promote and adopt ‘highest ethical/ moral’ standards and pursue ‘best business practice’ in the conduct of its business operations.
In matters of Marketing, Advertising, and the use of promotional literature,
Ensure compliance with all applicable legislation,
Adopt accepted Advertising Norms, Standards, and practices,
Ensure that Advertising/Promotional literature does not carry misleading information,
Ensure such material is directly or indirectly not derogatory or attempts to willfully damage the image and interests of competitors,
To ensure the undiluted maintenance of ‘Good Image’ and ‘Reputation’ of the Finance Industry as a whole;
To remain alive to the emerging and current needs of the Finance Services Industry, always remaining within the prudential levels of risk and conducting its strategic and business operations;
To observe at all times -Full Compliance with the Legislative and Regulatory changes;
To notify the Association of any matter that may adversely affect the reputation and goodwill of the Association, and /or the reputation of the Industry.
Any violation or action contrary to the principles and spirit of this CODE by any member Company shall be referred confidentially to the FHA for amicable reconciliation in the first instance, before seeking redress through the CBSL in its capacity as the regulatory authority.
Employee Relation
At all times, the stakeholders shall act in a professional and ethical way, and uphold the highest standards of honesty, trust, fairness, integrity, and diligence.
Build in provisions into employee recruitment schemes to ensure that it is made obligatory for employees to give due notice of vacation of service, when alternative employment is sought; and prescribe the associated financial penalties for failure and noncompliance to provide such notice
To ensure that Finance Companies make it obligatory upon themselves to require that new employees provide a standard certificate of good standing and a Release from the previous Employer.
To ensure adoption of ethical practices in recruiting employees from other member Registered Finance Companies;
It shall not be made obligatory for an incoming employee to prevail upon customers serviced by such employee during his/her previous employment, to transfer their custom or deposits to the new company.
Provide adequate professional training for their employees,
Essential Legal Obligations
Every member shall
Obtain a declaration from all employees as prescribed under Section 61(2) of the Finance Business Act No 42 of 2011
Ensure that employees are conversant with the provisions in the ‘Code of Conduct’.
Guidelines for the conduct of business lawfully in compliance with all applicable legislation, shall be issued by each Company to its employees.
Comply with all Guidelines, and Regulatory Requirements and Instructions issued by the Management Committee.(Executive Committee of the Finance Houses Association).
Shall conduct its business
Lawfully
In compliance with all relevant Legislation, Judicial Decisions, and all ‘Fair Trade’ practices.
Strict Compliance with the provisions of –‘Financial Transactions Reporting Act No 6 of 2006’, particularly concerning.
Know Your Customer (KYC), and customer Due Diligence Rules
Strict compliance with the rules prescribed by
Money Laundering Act No 5 of 2006, and conventions on the Suppression of Terrorist Financing Act No 25 of 2005, and report any suspected Transactions to the ‘Finance Intelligence Unit at the Central Bank of Sri Lanka.
Confidentiality of Information
All information furnished by a customer is strictly confidential,
Never release customer information to a third party,
Unless required by law, or under the direction of a court of law and unless specifically authorized by the customer.
Essential Legal Obligations
The Right of Repossession shall be exercised only after strictly following the due process prescribed in the
Finance Leasing Act No. 56 of 2000 and consumer Credit Act No. 29 of 1982
Repossession agents will be obligated to follow the specific guidelines issued to them
Breaches of the Code of Conduct
Any lapse or a breach of the provisions stipulated in this Code of Conduct by any employee of a member Registered Finance Company would constitute a ground for disciplinary action to be prescribed by each Company.