KARACHI, Feb 27: All banks will introduce Basic Banking Accounts (BBA) from next month, mention the mark-up on loans whether it is floating or fixed and will not charge insurance premium on credit cards without getting written consent from the card holders.

These were the decisions taken in a meeting of the Pakistan Banks’ Association (PBA) chaired by State Bank governor Dr Shamshad Akhtar here on Monday.

The introduction of basic accounts was one of the last important decisions taken by the former SBP governor to facilitate poor masses of the country. The basic account allows a minimum initial deposit of Rs1,000, no limit on minimum balance and no fee for maintaining it.

For the existing banking accounts, banks may get the consent of all their customers whether they wish to maintain a BBA or a regular full service banking account with its accompanying terms and conditions. In case an accountholder does not give his or her consent for a BBA, his/her account will be treated as a regular full service banking account.

Another major decision was that the banks would disclose prominently as to whether the credit extended by them is on fixed or on floating basis. Banks would print in bold letters their mark-up rates, wherever disclosed, on their forms and advertisements for the benefit of the customers.

It was also decided that banks must inform their customers about the insurance premium being charged by them on credit cards and ATM cards. There was a general complain against the banks that the insurance premium was being charged without mentioning the credit card holders.

It was emphasized by the SBP that the banks can charge insurance premium only with the written consent of their customers.

The meeting decided to switch over to the new system of reporting to the CIB as quickly as possible.

The SBP governor informed the meeting that the technical work on Real Time Gross Settlement (RTGS) System was advancing steadily. The trial run of the system would commence by the middle of this year. She also informed the meeting that the SBP planned to hold a comprehensive briefing for CEOs and the relevant RTGS Coordinators on RTGS. Both SBP and the financial industry need to prepare themselves adequately for eventual adoption of RTGS.

A working group comprising the PBA, operation managers of banks and the State Bank and SBP BSC officials has been set up to look into the modus operandi in exchange of soiled, cut, mutilated and claim notes as well as sale and encashment of prize bonds.

Briefing the participants of the meeting on the Basel II, Dr Shamshad Akhtar said that the SBP had a road-map for its implementation. She stressed the need of periodic consultations between the PBA and the State Bank on the implementation of Basel II.

Answering a question of one of the participants, the SBP governor informed the meeting that there was no change, in principle, in the Branch Licensing Policy of the State Bank. However, she said that the State Bank would carefully examine the branch expansion plan of individual banks. She pointed out that some of the banks had not fulfilled their last year’s targets of opening of branches. She impressed upon the banks to strengthen their existing branches to provide better quality services and integrate them with their head offices.

Dr Akhtar asked the banks to open new branches in far-flung areas to cater to the needs of rural population. Banks must avoid expansion and concentration of their branches in big cities only, she added.

The meeting was attended among others by SBP Deputy Governor Tawfiq A. Husain, SBP BSC managing director Liaqat Durrani, Directors of Banking Policy, Banking Supervision, Banking Inspection and Small & Medium Enterprises Departments of the State Bank and a 15-member Executive Committee of the PBA led by its chairman Naved A. Khan.