April 17, 2008	Thursday	Rabi-us-Sani 10, 1429

KARACHI, April 16: The seven banks facing penalties imposed by the Competition Commission of Pakistan (CCP) are considering approaching the State Bank and Supreme Court of Pakistan.

No decision was, however, taken on Wednesday.

“We discussed and considered various options regarding the penalties imposed by the CCP, but have not yet finalised it,” Pakistan Banks’ Association President Aftab Manzoor, told Dawn on Wednesday.

The CCP on Tuesday imposed a fine of Rs30 million on the PBA for its role in the operation of a ‘cartel’, while each of the banks is liable to pay Rs25 million.

The penalised banks are Habib Bank Limited (HBL), Allied Bank Ltd (ABL), Muslim Commercial Bank (MCB), United Bank Ltd (UBL), Saudi-Pak Bank, Atlas Bank Ltd and National Bank of Pakistan (NBP).

“We took an initiative for small depositors and offered higher returns, but the CCP made it a cartel issue,” said Mr Manzoor.

Apparently the PBA has three options: to file a review appeal against the verdict before the CCP; to go to Supreme Court or to involve the SBP to tackle this situation.

When asked, the PBA president said that the SBP was the mother regulatory body of banks, and it would be approached.

SBP Governor Dr Shamshad Akhtar was not available for comments.

Some bankers feel that the CCP went beyond its jurisdiction while the commission said that the PBA overstepped its mandate.

The CCP decided to take an action against the PBA and the banks after publication of an advertisement announcing introduction of Enhanced Savings Account (ESA) scheme on behalf of its members.

“We don’t accept the view that any cartel was formed. In fact, we decided to pay better return to small depositors,” said Mr Manzoor.

NBP President Ali Raza also denied existence of any cartel in the banking, and said that the PBA would take a decision after seeking a legal advice.

“We don’t accept these penalties,” Ali Raza told Dawn.

“We have asked our lawyers to come out with a suggestion to enable us to reach a decision.”

Some top bankers were of the view that the SBP would not be able to tackle this situation, and the banks would have to go to Supreme Court.

“There is no possibility of banks approaching the CCP for reviewing penalties.”

“It will simply mean that the CCP will get a permanent role and right to interfere in the banking affairs,” said a senior banker who avoided to be quoted.