SBP plans bill to protect banks consumers rights

KARACHI - The State Bank of Pakistan is planning to introduce ‘Consumer Protection Bill’ soon with an objective to improve banks’ services towards consumers as well as to guarantee their protection in an increasingly market-oriented financial system.

The laws, regulations and codes of the said bill will be framed in line with international best practices, which would among others provide guidance on issues of transparency, confidentiality, availability of statements, account servicing, protection against fraud, unfair contracts and lending practices, methods of debt collection, arbitrary penalties, etc.

For this purpose, an appropriate dispute settlement mechanism will be established by SBP under its Consumer Protection Department which had already established last year.

The CPD is expected to monitor compliance with such new laws and regulations. According to the sources in the Ministry of Finance, SBP will be making consumer protection infrastructure to supplement and reinforce these laws.

The SBP on its part is focusing on effective compliance with customer service regulations and following it up with proper enforcement to motivate banks to render good service and deal fairly with customers, sources said.

In the coming years, the financial sector will increasingly be deregulated so as to increase competition. The challenge is to ensure that this deregulation does not disrupt the level or reliability of service to consumers. The government’s strategy in this area includes policy recommendations to secure consumer rights in an ever-growing highly liberal financial system.

Meanwhile, according to a document titled Poverty Reduction Strategy Papers II prepared by Ministry of Finance, the government is very much inclined to strengthen the supervisory regime of the SBP. The main focus of the strategy is the further refinement of regulations and the supervision framework. The govt wants to encourage Pakistan Banks’ Association (PBA) to adopt a Banking Code to commit banks to fairness, disclosure and ethical standards.

Courtsey: The Nation