SBP vows to address issues of banking consumers
State Bank of Pakistan (SBP) has admitted that consumers' issues are increasing in the banking sector despite increasing competition market, advancement in technology and growing businesses of the banks as it received surging complaints from the people.
In its Strategic Plan SBP Vision 2020, the banking system needs improvement in the general areas of efficiency, effectiveness and fairness.
One of the key roles for SBP is to foster the stability and soundness of the banking system while, at the same time, safeguarding the interests of depositors and stakeholders as the objectives of financial system stability are much wider than a safe and sound banking system.
Because the financial system stability is important for three key reasons: it creates trust and confidence by savers and investors in the financial system and its institutions; it provides a stable base for the transmission of monetary policy and therefore, price stability; and, it encourages efficient allocation of capital and trade which, in turn, underpin economic activity and growth
SBP vowed to improve the fairness and efficiency of the banking sector through broadening access to products and services that meet consumer and small business needs. The central bank will establish minimum service standards for responding to indus- try applications.
It said the central bank has sought out principles aimed at improving the quality and appropriateness of information received by banking customers.
It sought to eliminate unfair and deceptive practices and empower customers through resolution of disputes.
The central bank decided to step back from direct involvement in disputes along with collaboration with Banking Mohtasib Pakistan to play its proper role in dispute resolution.
It has decided to strengthen the Fair Treatment of Consumer (FTC) regime by implementing an appropriate Banking Code of Conduct, an effective dispute resolution regime through the BMP, and establishing a monitoring framework.
The central bank plans for streamlining the regulatory and supervisory frameworks and improving the way SBP interacts with industry, including establishment of the Financial Law Reform Committee.
It has decided to establish a join working group with Security and Exchange Commission of Pakistan to ensure consistency in application of conduct standards across the financial sector.
The fairness of the banking system could be done through improving the efficiency of financial intermediation by streamlining and reducing as appropriate, the regulatory burden, it said. A more competitive and diverse banking system will improve the efficiency and quality of financial services and encourage innovation.