ISLAMABAD, Feb 21: The Competition Commission of Pakistan (CCP) has observed that it could impose a fine of up to Rs50 million on the banks found guilty of behaving like a cartel while launching various financial products.

The CCP concluded on Thursday public hearings against 41 banks and the Pakistan Banks’ Association.

In November last year after a meeting of its members, the PBA issued a circular and then got it published as an advertisement in the national press which said: “Under the auspices of Pakistan Banks’ Association, all scheduled banks introduce the Enhance Savings Account (ESA). Now you (depositor) can earn 4 per cent p.a. profit on your average balance up to Rs20,000 in your PLS Savings Account”.

The CCP took notice of the advertisement as it smacked of cartel-like behaviour which was an offence under the Competition Ordinance, 2007.

The commission had served notices on these institutions and sought their comments on the issue.

On the last day of hearing, Punjab Provincial Co-operative Bank, Al-Baraka Bank and the Bank of Punjab recorded their statements.

A CCP press release said the main questions asked from the representatives of banks were:

Are you a member of PBA?

Was your representative present in the meeting of PBA which took the decision about the rate of interest to the depositors which was later advertised by the PBA?

Did your representative support the decision? Was it opposed? Or that he remained silent?

Have you implemented the decision or planning to implement?

The representatives of the banks explained their respective positions during the hearing.

The CCP, however, asked them to submit their comments in writing within a week. The final decision will be taken in due course.