Ombudsman office fails to address grievances

KARACHI: The office of the Banking Ombudsman of Pakistan has rejected more than half the complaints brought to notice during 2009.

At a press conference held here on Thursday, Ombudsman Mansoor-ur-Rehman Khan revealed that out of 3,223 complaints received in 2009, 56 per cent had been rejected.

He said that many of these complaints could not be assessed by the institution because they related to cases already pending before either the State Bank of Pakistan (SBP) or courts. The ombudsman added that out of the remaining complaints, 17 per cent were granted in favour of the complainants while 19 per cent were decided against them.

Khan highlighted that the institution had lost the ability to impose fines on banks because of a judgement given by Lahore High Court. The institution now relied on issuing notices to banks without possessing the ability to enforce its decisions.

He said the ombudsman office had sent a list of recommendations to State Bank of Pakistan (SBP) for changes in the Banking Companies Ordinance of 1962. The ombudsman explained that these changes would remove deficiencies from the banking system and would expedite the process of complaint and dispute resolution.

Akbar Ali Habib, Adviser to the banking ombudsman, suggested to the SBP that “at the time of extending a loan against gold ornaments, evaluators should be asked to assess the value of stones and approximate making charges as well.”

Another recommendation was that the notice period for banks to respond to a dispute should be reduced from 45 days to 15 days.

Twenty-eight per cent of all complaints recorded were consumer based, 23 per cent were about loans, advances and credit schemes while 10 per cent concerned frauds committed by banks against clients.

Habib commented that credit cards appeared to cause most trouble to customers as complaints regarding these stood at a whopping 63 per cent of all consumer-based complaints. Auto loans drew 25 per cent of these objections while grievances against consumer loans stood at 12 per cent.

According to the annual report of the banking ombudsman, United Bank Limited (UBL) had the highest number of grievances recorded against it. Two hundred and twenty two complaints against UBL pertaining to 2009 were resolved while another 200 complaints from previous years were also settled. However, the list of complaints per branch was topped by Citibank, Royal Bank of Scotland and Standard Chartered Bank.

The ombudsman has advised SBP that many of these complaints could be easily eliminated by ordering banks to collect copies of Computerised National Identity Cards (CNIC) before payments were made against cheques and similarly, before new cheque books were issued.

Additionally, it was suggested that photographs of credit card holders should be printed on cards and until this change could be fully implemented, the CNIC of the credit card holders should be checked prior to the transaction. The ombudsman maintained that the office was a cheap and speedy alternative to litigation and urged complainants to come forward.

Published in The Express Tribune, July 9^th, 2010.