SCB, KTB fined for forced sales
Siam Commercial Bank (SCB) and Krungthai Bank (KTB) have instructed their staff at branches nationwide to strictly comply with the central bank's market conduct rules after they were fined more than 6 million baht combined.
On Wednesday the Bank of Thailand announced fines of 3.21 million baht for SCB and 3.54 million for KTB after it found staff at both banks forced customers to buy fire insurance policies issued by their affiliated firms.
KTB has instructed employees at all branches since the beginning of this year to avoid offering only products of affiliated companies, giving customers more alternatives, said president Payong Srivanich.
KTB ordered its branches to strictly comply with the Bank of Thailand's market conduct rules and radically revamped its working processes by focusing on three levels of internal risk management, communication and training to create understanding of market conduct practices, he said.
The bank also performs random checks to see if the measures are being followed and has clear punishment measures, said Mr Payong.
KTB's board has a clear policy to focus on ethics, promoting several activities such as Compliance Champion, CG in Process and zero tolerance, as well as its market conduct measures.
The bank prohibits staff from trying to force products on customers.
He said KTB has launched a Train the Trainer programme as a prototype, demonstrating the appropriate practice to offer financial services to customers. Those who fail the test are not permitted to sell any products to customers.
Moreover, the bank employs mystery shoppers in different zones to enforce compliance.
The central bank's comprehensive regulation on market conduct, covering end-to-end financial institution processes that are related to customer services, has been in force from the beginning of this year to ensure appropriate and fair services and fees. It also aims to provide information to protect customers' rights.
The regulation requires public disclosure of wrongdoing on the central bank's website and on the financial institution's website, where it can be easily accessed.
SCB said the bank realises the importance of market conduct and using a customer-centric approach.
"SCB has pleaded guilty and addressed the mistake by communicating and educating staff about market conduct, helping them to understand practical guidelines to prevent future mistakes," the bank said.