SBP reviews complaints against banks and DFIs

Move will help gain insights into effectiveness of complaint management

KARACHI:

The State Bank of Pakistan (SBP) conducted a four-year (2016-2019) review of complaints against banks, microfinance banks and development finance institutions to gain insights into the effectiveness of complaint management at banks.

In a statement issued on Thursday, the central bank said the review was conducted in addition to various regulatory measures to enhance consumer grievance handling in the industry including the issuance of detailed guidelines on complaint management at banks and self-assessment framework.

“It is pertinent to mention that responsible banking conduct and Fair Treatment of Consumer (FTC) has been one of the key regulatory agendas of the SBP,” it pointed out.

The review indicated that complaints against banks during the past four years have increased from 774,656 in 2016 to 1,549,837 in 2019.

“This increase can be attributed to improved visibility and access to dispute resolution mechanism coupled with enhanced consumer awareness,” it stated.

Moreover, this was also due to the fact that the number and value of banking transactions have increased substantially.

The volume and value of ATM and debit card transactions have increased by 101% and 110%, respectively over the reporting period.

The number of deposit accounts per ATM and per branch recorded an increase of 62% and 81%. Similarly, from 2016 to 2019, the volume and value of e-banking transactions have substantially increased by 112% and 152% on account of a 71% increase in e-banking users, the review highlighted.

Furthermore, credit card related transactions surged from 18 to 39 million posting an increase of 118% over a span of four years. Accordingly, the increase in complaints about the same period can be witnessed as concentrated in ATM or debit card, account maintenance, e-banking and credit cards, the statement said.

“Banks have been handling 97% and above of the total complaints of the industry while less than 3% of complaints were escalated at higher levels including State Bank of Pakistan, Banking Mohtasib, and Pakistan Citizen Portal established by the Prime Minister Delivery Unit,” the statement highlighted.