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Problems and Possible Solutions for the OIC Member Countries
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4.10.6. Consumer Protection Architecture
Consumer Protection and Financial Literacy
Although the local government of Khartoum Regional State has adopted the Commerce
Regulation and Consumer Protection Act (CRCPA) number (8) of the year 2012, it does not
include any clauses that protect the consumers of the financial sector (CRCPA, 2012). However
the Civil Transaction Act of 1984 (CT Act, 1984) and Companies Act of 1925 amended 2015
and Criminal law of 1991 (clause 177 (1), criminal breach of trust) all together accommodate
consumer protection in Sudan. There is no Ombudsman or specific institutional mechanism
found in Sudan where consumers can report or claim unfair treatment.
There is no special financial literacy scheme for consumers in Sudan. This can be seen by the
low private domestic savings rate in Sudan and the fact that financial intermediation is
drastically less deep and less developed. The ratio of domestic savings to GDP is only 10% in
2012 which is below the Sub-Saharan average of 20% and most neighboring countries. Poor
financial literacy, low income levels, a large informal sector, the small size of banks and their
limited geographical spread are the major reasons behind this low performance. Only 7% of
adults, have bank accounts which is lower than the average of 24% in Sub-Saharan Africa, 18%
in the Middle East and North Africa, and the world average of 50%, (Siddig, 2014). One of the
main objectives of the Sudan Banks Union (SBU) is to disseminate Islamic banking awareness
in the community and to foster and improve confidence in the banking and financial system.
Most of the activities of the SBU are limited to banking training courses and workshops. It also
provides masters and PhDs scholarships to applicants from bank staff who meets their terms
and conditions. It has sponsored 18 PhDs and 15 masters during the period 2002-2014, (SBU
2016).
Deposit Insurance
The Bank Deposits Security Fund Act, 1996 (BDSF Act, 1996) provides the legislation related
to the deposit insurance system, including the establishment of the Bank Deposit Security Fund
(BDSF) that represents the administrative authority of the deposit insurance system, (BDSF
Act, 1996). Following the issuance of the act, the Islamic Deposit Insurance System (IDIS) in
Sudan was initiated in 1996. It is managed by the Bank Deposit Security Fund (BDSF), a CBOS
entity (CBOS 2104). The system is completely Shariah-compliant where the BDSF adopts
Takaful contract for its deposit insurance. Takaful contract works based on collaboration
between the Ministry of Finance, CBOS, banks, and depositors. The adoption of Takaful
contract was approved by the High Shari'ah Supervisory Board. IDIS operations are funded by
the payments received from the banks. Annual premiums are calculated based on the average
total insured deposits as at 31 December of the previous year on a flat rate basis. Each of
Ministry of Finance and CBOS pay 10% of the total amount of the annual banks’ calculation.
The Takaful fund for the guarantee of current and savings deposits is paid by banks, Ministry of
Finance, and CBOS. The Takaful fund for the guarantee of PSIAs is paid by PSIAs holders, and
the Takaful fund for financial insolvency incidents is paid by banks, Ministry of Finance, and
CBOS. BDSF’s capital was provided for by an initial payment from the CBOS, Ministry of
Finance, and banks. Membership is obligatory for all banks including branches of foreign
banks. The maximum coverage limit for savings deposits is USD 1,500 per depositor per bank
and the maximum coverage for PSIAs is USD 2,000 per depositor per bank, (IADI, 2010).