SBP conducts four-year review of complaints against banks, DFIs, MFBs

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–Central bank attributes increase in number of complaints to improved access to dispute resolution mechanism

–Says number of e-banking users increased 71pc, credit card transactions surged 118pc in last four years

KARACHI: The State Bank of Pakistan (SBP) has conducted a four-year (2016-2019) review of complaints against banks/MFBs/DFIs.

“The objective of the review was to gain insights into the effectiveness of complaint management at banks. The salient features of the review are being published to emphasise SBP’s narrative that responsible complaint handling is the core element of Fair Treatment of Consumer (FTC),” said a statement issued by the central bank on Thursday.

This review is 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 FTC is one of the key regulatory agendas of the SBP. The central bank recognizes that effective and efficient consumer grievance handling mechanisms are crucial elements of the FTC regime, therefore, it considers consumer complaints as an opportunity to improve banking services and increase customer satisfaction.

The review indicated that complaints against banks during the past four years 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. Further, this is also due to the fact that the number and value of banking transactions have increased substantially. For instance, the volume and value of ATM/debit card transactions have increased by 101pc and 110pc, respectively, over the reporting period.

The number of deposit accounts per ATM and per branch showed an increase of 62pc and 81pc, respectively. Similarly, from 2016 to 2019, the volume and value of E-banking transactions have substantially increased by 112pc and 152pc respectively on account of a 71pc increase in E-banking users. Moreover, credit card related transactions increased from 18 to 39 million showing an increase of 118pc over a span of 4 years. Accordingly, the increase in complaints during the same period can be witnessed as concentrated in ATM/debit card, account maintenance, E-banking and credit cards.

In terms of addressing the complaints, the resolution rate over the period 2016-2019 remained above 97pc at each year’s end. The average time taken for resolution of complaints remained within the regulatory turn around times. However, delays were observed in sending acknowledgements, interim and final responses.

It may be mentioned that banks, being the first forum of redressal, have been handling 97pc and above of the total complaints of the industry while less than 3pc 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.

In order to boost the performance of complaint handling at banks and promote competition, SBP plans to further enhance related disclosures which may include publishing of bank-wise complaint handling performance indicators in the near future by SBP. Currently, banks themselves are required to give disclosure about the complaint management in their annual audited account for public information.

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