Notwithstanding the multi-institutional coordinated approach to improve the quality of banking services in diverse fields, complaints by banking consumers registered with the Banking Mohtasib Pakistan ( BMP) have surged.

The swelling numbers include 3,930 complaints received by BMP from the Prime Minister Portal relating to banking issues in the year 2019.

The institutions responsible for improving bank performance are the State Bank Pakistan (SBP), management of commercials, SBP-affiliated Institute of Bankers Pakistan and the Banking Mohtasib.

While the induction of Fintech is of enormous benefit for both banks and their customers, the avoidable minor lapses in the way technology is applied, however, poses financial risks in IT and ATM-related products for banking consumers.

First, the bank staff’s lacks understanding and experience required in this pioneering work, which has lately picked up speed because of Covid-19. For example, to quote from its report for nine months performance ended September, United Bank’s digital customer base stands at 1.2 million as on September 30, with around 20 per cent of the bank branch customers now conducting transactions through the platform. UBL President and CEO Shazad Dada says “we aim to create operational efficiencies within our businesses with a clear approach to deliver simpler, better, faster (services) across all channels.” However many banking consumers, particularly in rural areas, are not aware of how the new technology could be misused against them by fraudsters.

No doubt, as the BMP notes, banks are trying to increase public awareness about digital accounts and guiding their customers not to disclose details of their personal and financial credentials to unknown persons if calls are made from banks’ telephone numbers.

Nonetheless, over the past two to three years a large number of complaints of unauthorised fund transfers was received by the Mohtasib.

Of the total complaints received by BMP from January to June, the ATM-related cases accounted for 16pc, internet banking 3pc and frauds 9p. Of the 19 different categories of grievances, ‘service efficiency/delays and others’ accounted for 19pc, gross dereliction of duty 27pc and consumer products 7pc.

Notwithstanding the Covid-19 triggered disruption in institutional working, the total complaints received during the six months shot up to 11,174 as compared to 14,587 for the whole year 2019. Concerned over the situation, a series of meetings were held between the BMP and the SBP officials in the period under review to bring ‘further improvement’ in services being provided by the banks to their consumers. Efforts of bank managements in this regard are proving inadequate so far.

According to a latest bi-annual Motasib report for January to June, the discussions covered a wide range of topics including inter-bank transfers, systemic deficiencies, payment system, and legal issues relating to consumers. The SBP was also informed by BMP about the non-compliance of the guidelines by banks issued by the regulatory authority from time to time. During case investigations, the BMP report says the forum came across systemic deficiencies and control weaknesses within the banking system.

The lapses were also pointed to the senior concerned bank officials on a routine basis. For example, BMP found that both the inbuilt cameras and CCTV were not placed in the correct angles and in certain cases the CCTV footages were destroyed during the pendency of the dispute. Senior bank officials do not attend the hearings of the complaints and the lower cadre quite often are not well versed with the cases.

To train the bank staff how to face the emerging challenges, the Institute of Bankers Pakistan (IBP) organised three training courses. In February it held a course on ‘Internal and External Frauds — Tools for Fraud Investigation and Reporting’. Earlier in November 2019, it held workshops on ‘Digital Banking Trends and Challenges’ and ‘Cyber Security- Challenges.’ Mohtasib officials say certain fraudsters misguide and cheat those consumers who have poor knowledge about latest banking techniques and products.

BMP was set up in 2005 with the focus (a) to resolve grievances of consumers and depositors amicably, speedily and free of cost; (b) to ensure that banks not only comply with State Bank rules and regulations but also apply them in a ‘fair and judicious manner.’ The number of complaints BMP handled in that year was 6,091.

In its report, BMP also attributes the surge in the number of complaints, among other factors, to the alternate dispute resolution forum it offers and its efficient disposal of cases. In the first of half of 2020, 10,447 disputes were amicably resolved through conciliation out of a total of 13,952 including 2,778 complaints carried forward from 2019.

The relief thus provided amounted to Rs3.18m in six months against the annual average of some Rs380m for the previous five years. Last year the cases thus resolved were recorded at 10,324 out of a total of 15,639.

In only 130 cases, the Mohasib’s issued orders to banks to provide relief to the aggrieved. Grievances requiring further information/documents in 674 cases were rejected.

Province-wise complaints in the period under review were: Punjab 58.62pc, Sindh 17.08pc, Khyber Pakhtunkhwa 10.46pc, Balochistan 6.43pc. overseas 6.45pc and Azad Kashmir 0.93pc.

While the complaints were limited to a few foreign banks, by far the highest number for a single organisation was that of a leading privatised domestic bank.

As the SBP is vigorously pursuing the banks to step up financing for under-served house-building/construction sectors and small- and medium-sized industries, the quality of banking services assumes added importance for the success of prioritised financing schemes.

Published in Dawn, The Business and Finance Weekly, November 2nd, 2020