| PART
I — Code of Ethics for Bankers
INTRODUCTION
(1) |
Banks need to have an ethical base - this
is sound commercial sense. Business decisions
should not take place within the framework
of 'anything goes'. Every society therefore
needs to have a set of principles and moral
codes to work to. A responsible business needs
to have a clear idea of 'right and wrong behaviour'.
As a general principle, customers and investors
will vote with their money for ethical products
and services from ethical companies.
As banks operate in a broad environment in
which they have to respond selectively to
social, political, economic and customer issues,
they are at the same time obliged to satisfy
the expectations of their shareholders and
employees.
It is therefore essential that a collective
statement of standards for personal and corporate
behaviour be subscribed by all persons entering
or already in the banking profession in Tanzania.
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(2)
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The
Tanzania Institute of Bankers (TIOB) as a
professional body among its principal objectives
include the promotion, encouragement and provision
of opportunities for its members to acquire
knowledge and skills of the theory and practice
of banking and to facilitate the consideration
and discussion of matters of interest to bankers
and persons associated with banks and financial
institutions. |
(3) |
The
Institute is further entrusted among its objectives
to act as a regulatory and disciplinary body
for the banking profession and to promote
professional integrity and ethics among its
corporate and individual members and therefore
to set standards for the banking profession.
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(4) |
It
is in accordance with the demands of promoting
the trust and confidence of the banking industry
that a Code of Ethics for Bankers is desirable
to all persons engaged in the business of
banking in preserving and safeguarding the
basic general principles which apply to the
profession in regard to integrity, confidentiality,
loyalty and legality. As banking business
is founded on mutual trust and public confidence
it applies to every banker to be solicitous
in their personal and professional behaviour.
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(5) |
This
Code states the basic and universally accepted
values of the profession of banking. Corporate
members are encouraged to devise their more
detailed Codes to meet the aspiration of their
staff and Institutions in general. |
(6) |
The
Instituteís Code of Ethics is not intended
to replace the existing Codes of Conduct or
Staff Regulations and Standing Orders applied
by all Corporate members but such documents
are envisaged to be consistent with this Code
of Ethics for Bankers. It is repeatedly emphasized
that Corporate members should devise their
own Codes of Conduct enforcing the Ethics
for Bankers. In order to ensure the enforcement
of the Code it is also important and desirable
for any breaches committed by individual members
to be communicated to TIOB by all Corporate
Members in their capacity as employers of
bank staff. |
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PROFESSIONAL CONDUCT
GENERAL OVERVIEW:
Members of the Institute have a duty and responsibility
of accountability to their employer, to their employerís
customers, to their colleagues, to members of other professions,
to the profession itself and the public in general. Corporate
members are also obliged to conform to the code in addition
to having a duty and responsibility to their employees.
The need therefore for the Tanzania Institute of Bankers
members to have a Code of Ethics is of paramount importance
for reasons of observance of strict rules of conduct by
all members. It is in this respect that the Code of Ethics
is formulated with the objective of providing a collective
statement of standards for personal and corporate behaviour
and more essential to enable those who use the services
of banks do so with complete confidence in the integrity
of those with whom they deal with in the banking business.
All members of the Institute are therefore expected to
conduct themselves in a manner reflecting the behaviour
a banker is expected of in regard to upholding the highest
standards of honesty, integrity, and performance in all
their dealings both internally and externally. All members
must therefore:
- Adhere
to generally accepted principles of honesty,
integrity and individual attitude to uphold
the mutual trust and public confidence bestowed
upon them.
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-
Be fair minded in behaviour and approach in
their day to day dealings both in office and
during their social interactions. They are expected
to be committed to high standards of conduct
in daily social life in order to uphold the
dignity, reputation and good standing of a member
and the profession of banking.
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-
Be courteous and considerate when executing
duties in their public offices.
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Avoid acceptance of gifts, services or regards
arising from performing their duties which would
affect membersí independent judgement
when accepted. Monetary gifts for rewards are
thus strictly forbidden. Further to this, avoid
situations which could involve and compromise
oneís impartiality.
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- Be
obliged to acquire necessary skills and knowledge
to undertake a task in a professional way.
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- Display
of professional skills and competence are pre-requisites
of all members in discharging their duties.
Compliance with the technical and professional
standards by virtue of a memberís responsibility
and position held are aspirations to be demonstrated
by all members who should also keep abreast
of current developments to ensure that a memberís
expertise is constantly up-to-date.
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- Give
proper consideration to financial factors and
the wider implications on oneís decisions
when giving information or financial disclosure
to customers seeking independent professional
advice in appropriate circumstances.
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- Always
as expected for bankers, develop and maintain
constructive dialogue with co-members and seek
help and advice from appropriate colleagues
when difficulties arise in matters of judgement.
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ETHICS FOR BANKERS
OBJECTIVES:
The Code of Ethics sets down fundamental principles seeking
to achieve the ethical conduct of banking business. The
Code aspires at all times to enable the members practice
the highest standards of the profession while at the same
time satisfy the statutory and regulatory requirements
governing the banking business in the country.
In this regard, the Code of Ethics has been formulated
with the following objectives:
- to
provide a collective statement of standards
for personal and corporate behaviour,
- to
ensure adherence to principles of professional
behaviour,
- to
promote and maintain confidence in the banking
profession,
- to
resist and highlight improper or unprofessional
conduct,
- to
uphold social values, laws and customs of Tanzania
in the banking industry,
- to
instill a sense of honesty, fairness and decency
in the conduct of banking business,
- to
harmonise the concepts of profitability and
social responsibility,
- to
instill commitment to high standards of ethical
behaviour by institute members,
- to
reinforce compliance with regulators,
- to
enhance and sustain public confidence of banking
Industry in Tanzania.
- to
safeguard the cornerstones of the Banking Profession,
- to
respect our rules of professional conduct,
- to
add value and support to Rules and regulations
laid down by member banks and other organisations
as employers.
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The Code is thus founded to achieve its
objectives on the following principles:
1. INTEGRITY
2. CONFIDENTIALITY
3. LOYALTY
4. LEGALITY
1. INTEGRITY
This implies adherence to accepted moral principles
of being honest, impartial and fair-mindedness. Members
of the Institute therefore shall maintain their integrity
at all times and therefore must:
(a) |
Confidential
Information
Never use confidential information for personal
gain or abuse of office held. |
(b)
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Conflicting
Business
Avoid conflict between private self-interest
and the interests of the employer, or customer.
In this case, members must be willing to disclose
any potentiality compromising or conflicting
business relationship to one’s superior
or employer. |
(c) |
Side
Business
Avoid any business interest/ or participating
in any business activity outside the bank
which would deprive the employer of the members’
best efforts on the job or interfere with
the independent exercise of judgement. |
(d) |
Use
of Property
Be trustful and desist from being tempted
to converting to own use or benefit any resource
not personally owned or approved for such
use by the employer. |
(e) |
Gifts
Never accept gifts, services, or hospitality
that would affect or be interpreted by ordinary
sound person as receiving bribe, kick back
or questionable payment. Here it is emphasized
that it is not realistic to rule out acceptance
of all gifts nor is it realistic to set a
limit value on gifts which may be accepted.
The reasoning and judgement rests on the integrity
of a member as to whether the gift might be
compromising or unreasonable given the circumstances
surrounding both the giver and receiver.
Any gift which is considered incompatible
for the purposes given or that it may embarrass
a member or employer if disclosed to the public
should be declared to the immediate supervisor
and or be gently refused. |
(f) |
Personal
Finances
Restrain to one’s financial abilities
in order to avoid being vulnerable to financial
difficulties and embarrassment that could
tempt one to malpractices leading to overdrawing
of personal accounts, theft, frauds and embezzlement
of funds. |
(g) |
Borrowing
Generally restrain oneself from borrowing
or lending transactions between members of
staff or employer’s customers. |
(h) |
Injury
Behave in a respectable manner and avoid any
conduct which may either directly or indirectly
bring discredit or injury to a member, employer
or the Institute. |
(i) |
Records
Maintain books of accounts and records in
compliance with applicable accounting standards
and prudential guidelines. |
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2.
CONFIDENTIALITY
Among the basic tenets which the banking
system is founded is confidentiality. This requires members’
utmost professional conduct in respecting and protecting
the privacy and secrecy of the employer, the employer’s
customers, fellow employees and any other groups on the
understanding that information acquired has been obtained
in confidence and merits the same care as protection of
funds. Members are therefore:
| (a) |
Duty
on Keeping Confidential Information
Restrained from divulging information to third parties
except with the consent of the employer or customer,
or where it is required by law or in conformity
with public duty arising in the proper course of
business. |
| (b)
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Inside
Dealing/Trading
Obliged to maintain utmost secrecy regarding members’
employers and employer’s business, financial
and personal affairs. Any inside information of
any kind must be safeguarded and not made available
for any subsequent unauthorised purpose. Information
referred to include trading in shares, securities,
take-over or merger, potential insolvency, profits
or losses, discovery of new product or services,
change of management, bank plans and methods. |
| (c) |
Declaration
of Secrecy
Required to prevent leakage of information to outsiders
by exercising care in the course of communication
whether oral, written or otherwise and also ensure
that documents such as circulars, manuals, records
and internal communication materials especially
those classified secret and confidential are not
shown to outsiders without proper authority. |
| (d) |
Access
to Documents
Required to restrict access to any confidential
or sensitive documents to only those authorised
to handle such information. |
(e) |
Right
of Colleagues
Obliged to safeguard and respect the rights of colleagues
to privacy on their personal affairs except when
the interest of employer , customer, or common good
would be at risk. |
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3.
LOYALTY
Above
the requirement of honesty and integrity, members owe
their primary business loyalty to their employer and being
faithful to the employers’ customers, the Institute
and the profession. Members, therefore;
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(a) |
Self
Interest
Must avoid participating in decisions by or on behalf
of the employer which may affect any private business
in which a member has an interest. |
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(b)
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Divulging
of Information
Are precluded from entering into arrangements or
colluding with employer’s competitors concerning
prices for services, the nature and extent of services
or other competitive policies or practices which
would be self dealing, or impair the effectiveness
and competitive strength of the employer. |
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(c) |
Use
of Official Hours
Are expected to render their best efforts on their
jobs and avoid depriving the employer of the use
of any official hours of business for personal or
individual benefit or self interest. |
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(d) |
Reputation of the Institute
Are
always expected to maintain and promote the good
standing of the Institute and the profession both
within and outside the country in addition to defending
the same against unfair or unwarranted criticism.
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(e) |
Personal
Responsibilities and Performance
Are expected to ensure that the business interests
and welfare of the employer and the customers are
protected and served to the highest standards and
skills. Where undertakings are given in the proper
manner during the course of business they are to
be honoured fully. |
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4. LEGALITY
The ethical conduct of banking depends upon the propriety
and behaviour of those engaged as professionals in the
banking industry. In this case, members should always
avoid any form of dubious business practice in contradiction
to the law and regulations of the country in which business
is conducted. They should also observe and comply with
published codes of relevant financial practises in relation
to the nature of business transacted.
As banking business operates on the fundamental principles
of trust and confidence, members therefore;
| (a) |
Illegal
Business
Should avoid engaging in business which is at variance
with legal or regulatory requirements. In this case,
members should ensure that all business transactions
are in compliance with the accepted traditions and
requirements so as to avoid any actions which might
be translated to be associated with or regarded
as supportive of illegal or criminal activities
such as money laundering. Business
that develops strong suspicion about a customer’s
operations and therefore raising doubts that funds
being transacted stem from money laundering should
secretly and promptly reported to the competent
authorities.
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| (b)
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Books
of Accounts
Should maintain books and records of accounts with
scrupulous integrity conforming to the highest acceptance
accounting standards reflecting in an accurate and
timely manner all transactions of business in adherence
to legal requirements. |
| (c) |
Frauds
and Forgeries
Should not engage in any acts of frauds, forgeries
and thefts. Above all, acts of false or artificial
entries or any peculiar attempts leading to obscuring,
omission or misrepresentation of material facts
should be condemned. Any instance of behaviour which
is at variance with the acceptable procedures, legal
and regulatory requirements should immediately be
reported to the appropriate authorities in any circumstances. |
(d) |
Submission
of Returns
Should always ensure timely and accurate submission
of all statutory returns to relevant supervisory
and regulatory authorities. |
| (e) |
Free
Competition
Should respect and uphold the concept of free and
fair competition in banking business among its corporate
members.
Members must refrain from collusive, defamatory
anticompetitive discussions, policies, practices
and agreements such as on interest rates, service
charges and other services offered which would injure
the reputation of a fellow corporate member and
ultimately distort business transactions and confidence
of a member. |
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PART
II — Guideline on disciplinary procedure
| 1. |
ENFORCEMENT
Pursuant to article 26 (f) of the Institute’s
Constitution, the Council shall have powers at
any of its meetings to impose such disciplinary
action as it thinks fit on any member acting in
a manner deemed to be contrary to the objects
or detrimental to the interests of the Institute
after obtaining a recommendation in this regard
from the Disciplinary Committee.
The council shall have authority to set up Investigating
and Disciplinary Committee to consider the case
of a member who may be accused of impropriety
of conduct and therefore determine what action
should be taken, including the possible expulsion
from the Institute’s membership.
Any complaint regarding the conduct of a member
shall be referred in the first instance to the
Chairman of the Governing Council who, if satisfied
that the matter involves only a minor breach of
the regulations, may either admonish the member
concerned or determine that no further action
shall be taken. Otherwise, he or she shall refer
the complaint to an Investigating Committee appointed
under the rule below. In any case, all parties
involved shall be informed of the decision arrived
at by the Chairman through the secretariat headed
by the Institute’s Executive Director.
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| 2.
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INVESTIGATING
COMMITTEE
| (a)
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Following
the referral of complaint under the previous
rule above, an Investigating Committee shall
be appointed by the Council from among its
members consisting of not less than three
nor more than five members, of whom three
shall form a quorum.
For purposes of expedient business the Council’s
Education and Membership Committee shall act
as the Investigation Committee unless decided
otherwise by the Governing Council at its
meeting.
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| (b) |
Subject to any directions from or regulations
made by the Council, and to these Rules, the
Investigating Committee shall regulate its
own procedure, and shall have power to seek
information from any source.
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| (c)
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The
member against whom the complaint has been
made shall be notified in writing of the nature
of the complaint, of the date on which the
matter is to be considered by the Investigating
Committee, and of his or her right to reply
in writing or be represented, (in case of
a Corporate Member) to speak, or appear in
person to cross-examine witnesses at the hearing,
and to submit evidence thereof.
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| (d)
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The
Investigating Committee, having heard the
case may determine that:
(i) no further action be taken; or
(ii) the member concerned should be admonished;
or
(iii) the member may have been guilty of unprofessional
or unacceptable conduct as defined in the
Institute’s Code of Ethics, and the
case be referred to a Disciplinary Committee
appointed by the Chairman of the Governing
Council under the following Rule. |
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| 3. |
DISCIPLINARY
COMMITTEE
| (a)
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Following the referral of a case under the
previous Rule, a Disciplinary Committee shall
be appointed by the Chairman of the Governing
Council from amongst the Council members (other
than those who have served on the Investigating
Committee which has heard the same case) consisting
of not less than three nor more than five
members of whom three shall form a quorum.
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| (b) |
The provisions of Rule 2(b) above shall apply,
mutatis mutandis, to the Disciplinary Committee.
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| (c)
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The Disciplinary Committee, having heard the
case, may determine that:
(i) no further action be taken; or
(ii) the member concerned be admonished; or
(iii) the member concerned be suspended or
expelled from membership of the Institute.
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| (d)
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In
case of a Corporate Member, the recommendation
on disciplinary action determined by the Disciplinary
Committee shall be submitted to the Governing
Council for further consideration and approval. |
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| APPEAL |
| (a) |
Any
member notified by the Disciplinary Committee of
his or her proposed
suspension or expulsion from membership may appeal
to the Council by writing within 21 days of receipt
of the notification (which shall be deemed to have
been received seven days after posting) and stating
the grounds of appeal which shall not thereafter
be amended except with the consent of the Council.
Members of the Investigating Committee or the Disciplinary
Committee involved in the case shall attend but
not participate in the Council’s deliberations.
For the purpose of hearing the appeal, the Council
Meeting, shall be chaired by the Chairman or Vice
Chairman of the Institutes Governing Council and
may co-opt other members not serving in the Governing
Council provided that they shall not exceed three.
As soon as practicable the Executive Director of
the Institute shall notify the member of the time
and place fixed for the hearing of the appeal.
The member shall be given a reasonable opportunity
to be heard. However, the Council may proceed in
the absence of the member provided it is satisfied
that notice of the hearing was properly served.
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| (b) |
On
any appeal the Council may by simple majority vote,
confirm, vary or rescind any determination of the
Disciplinary Committee.
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(c) |
The
Governing Council’s decision as an appellant
authority in this case shall be final.
Issued June, 1997 |
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Issued June, 1997
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