Thursday, January 27, 2022
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Improvement made in Consumer Grievances Handling Mechanism by SBP

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Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com

In today’s age, one of the challenge faced by banking system is to ensure fair treatment of consumers.

In this regard, financial consumer protection is amongst the top policy objectives pursued by central banks and financial regulators around the globe.

On a broader scale, financial institutions and policy makers have realized the importance of consumer protection and it is a well-known fact that no nation can attain financial inclusion and financial stability unless consumers feel confident in availing financial services. Innovation has disrupted conventional banking systems and advancement in Information Technology led by globalization has made consumer protection regime complex.

In the backdrop of these challenges, consumer protection has emerged key aspect of policymaking for financial institutions.

Pakistan’s financial arena has undergone drastic changes in line with global trends during the last decade. As technology has disrupted financial management, its repercussions on consumer protection are manifold.

Technology enabled products have been more efficient and service delivery mechanism has improved. However, the development of diversified financial products has given rise to various disputes, misunderstandings and dissatisfaction among financial consumers.

The significance of efficient complaint’s management cannot be stressed enough especially in a country like Pakistan where people are reluctant to approach financial institutions and financial inclusion has remained a serious challenge for policymakers in order to safeguard their interest, the SBP has intensified regulatory oversight on consumer protection related issues.

Efforts are being made to strengthen the consumer protection regime and banking conduct in Pakistan. In this regard, SBP has issued various regulations with an objective to streamline consumer protection mechanism and address grievances faced by individuals while availing financial services in the country. Banks, microfinance banks and Development Finance Institutions have been directed to provide more affordable, accessible, fair, accountable, and efficient grievance redressal.

SBP has taken various measures to augment responsible complaint handling mechanism by the banks. This is because banks are responsible for handling more than 97 percent of complaints associated with financial industry that are lodged each year.

Recently, SBP undertook a comprehensive review of complaint handling mechanism exercised at banks. In the review, SBP focused to measure specific aspects such as ‘ease of lodgment’, and ‘quick and fair disposal’ of complaints. In light of the feedback received by SBP and overall results of the study, it was decided to issue fresh directions to all banks.

The central bank has prescribed mandatory modes of complaint lodgment to banks with a direction to ensure their availability and accessibility at all times. These modes include Call Centers, Emails, E-forms, Surface mail, Fax, and Complaint boxes/registers. Additionally, banks have also been encouraged to invest in innovative modes of complaint lodgment like receiving complaints through SMS/Call Back Service, Mobile applications, Self Service Kiosks and other Social Media Platforms.

Banks have been further advised to create awareness about consumer protection regime and send awareness SMS messages in a bid to apprise public about existing ways to address their grievances. In order to track consumer’s complaints.

Banks are also advised to provide complaint tracking numbers so that consumers may measure the progress against their complaints. SBP has advised all banks to recruit and train sufficient human resources and provide necessary support system including Information Technology, skills upgradation programs etc.

It is heartening to see that such steps are being taken in Pakistan that are expected to result in the enhancement of consumer protection and hence consumer confidence in using formal financial channels.

This is extremely essential for Pakistan as we still have a large unregulated informal economy. Such encouraging efforts are likely to make banking easier, accessible and thereby encourage more people to switch to formal channels of financial management.

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