10:00, 27 April 2020 466 views
Bank of Russia recommends that banks wean employees off bonuses in view of cheating customers
The Bank of Russia recommended that commercial banks change their approach to the remuneration of their employees, explaining the request by “unfair practices” revealed. The respective letter signed by BoR Governor Elvira Nabiullina is published on the regulator's website.
The document says that bank employees offering and selling financial instruments and services often provide customers with incomplete or even inaccurate, “including misleading,” information about the details and risk exposure associated with such offerings.
The Central Bank believes that one of the reasons why bank employees leave some things unsaid to customers or simply lie to them resides in the banks’ practice of “financial encouragement” of employees to boost sales.
In view of that, the regulator recommended that commercial banks adopt standards for disclosing information about products and services offered to customers and reward employees for their compliance. Successful sellers of products and services can still hold out hope for the rewards, but only on condition that they have achieved sales growth without deceiving customers, otherwise the size of the bonus is to be reduced.