SBP asks banks to invest in complaints handling

The State Bank of Pakistan (SBP) on Monday directed all banks to improve their grievances handling mechanism, making it accessible and convenient for people to lodge complaints, track progress and get quick and efficient remedy.

The federal banking ombudsman earlier in a quarterly report had mentioned that over 135 per cent more complaints had been received in the first quarter of 2021 as compared to the first three months of last year.

However, the SBP directions were based on its findings of the review and the role of complaints in improvising banking services.

In order to make complaints registration easier and accessible, the SBP prescribed mandatory modes to banks for lodging complaints with a direction to ensure their availability and accessibility at all times.

The modes include call centres, emails, e-forms, surface mail, fax and complaint boxes and registers. Besides, banks were advised to invest in innovative modes of complaints registration like receiving complaints through SMS/call back service, mobile applications, selfservice kiosks and other social media platforms, said the SBP.

Such investment would not only boost convenience for customers but would also help banks capture and handle complaints in a better way. "Banks have also been advised to send awareness SMS messages at least on a bi-annual basis to create adequate awareness regarding the complaint lodgment modes deployed," said the SBP.

The SBP said it was in continuous pursuit of strengthening the consumer protection regime and market conduct of the industry. It is focusing on improvement in grievance handling mechanisms at banks, microfinance banks (MFBs) and Development Finance Institutions (DFIs) with the aim to provide affordable, accessible, fair, accountable, and efficient grievance redressal.

"For this purpose, various measures have been taken by the SBP to enhance responsible complaint handling by the banks, as they handle more than 97 per cent of complaints related to the banking industry in a year," the SBP stated.

Recently, the SBP had conducted a detailed review of complaint handling practices at banks, primarily focusing on 'ease of lodgment', and 'quick and fair disposal' of complaints.

State Bank of Pakistan Governor Reza Baqir on Thursday said that negotiations with the International Monetary

Fund (IMF) on the 6th review of its $6 billion financial package were going smoothly.

Last month, the IMF also said it was holding open and constructive discussions with Pakistan on the 6th review and stood ready to support the country in achieving its objectives of debt sustainability.

In July 2019, the IMF had approved a 39-month $6bn arrangement for Pakistan under its Extended Fund Facility (EFF) to support Islamabad’s economic reform programme.

Although Mr Baqir, a former IMF official, did not say what was causing the delay, the Fund indicated in a recent statement why the 6th review had not completed yet.

Expresses optimism sixth review of $6bn financial package will conclude positively

At a June 25 briefing, IMF spokesperson Gerry Rice told journalists that the completion of the review would “require continued discussions on the sustainable fiscal path, structural reforms, particularly on the tax and energy sectors”.

The two sides, he said, were also holding discussion on “social spending enhancements envisaged in the authorities’ reform programme that’s supported by the IMF resources”.

The SBP governor, who spoke to the Pakistani media after introducing Roshan Digital Initiative to a gathering at the embassy, said he could not tell when the 6th review would conclude but he was confident that it would end positively.

“We [the IMF and Pakistan] share the same goals. We too want to expand our tax net and improve our tax-to-GDP ratio,” Mr Baqir added. “We share the same objectives in other sectors too, such as energy and circular debt. The talks are about how to attain these goals.”

The IMF spokesperson, however, had underlined the need for “accelerated implementation of policies and reforms to address some of the longstanding challenges facing the Pakistani economy” while explaining why the talks remained inconclusive. He also said that a recent mission for talks on the sixth review “could not complete these discussions”, adding that the IMF “remains fully engaged” with the Pakistan authorities to conclude the talks.

Neither Mr Baqir nor the IMF official said if the Fund had halted or continued the disbursement during the interim period.

Last month, Pakistan set a target of 4.8 per cent growth in gross domestic product for the financial year 2021-22 and a fiscal deficit target of 6.3pc. The country surpassed growth projections in the financial year 2020-21 despite a third wave of Covid-19 infections, reaching GDP growth of 3.96pc, after a 0.47pc contraction in 2019-20.

Earlier, media reports suggested that the IMF had postponed the sixth review of its programme for Pakistan and the new assessment would take place in September.