KARACHI, April 18: The banks being penalised on cartel charges have decided to file appeal with the Competition Commission of Pakistan against its decision.

The CCP on April 15 imposed penalties on Pakistan Banks’ Association (PBA) and seven other banks for making a cartel accusing them of exploiting the depositors.

The decision of the CCP had shocked the banks as for the first time in the country the banks faced such a situation resulting in penalties with allegation of exploitation.

“We have decided to appeal against the decision as the CCP has provided option for it,” PBA president Aftab Manzoor told Dawn on Friday.

The Commission imposed penalty of Rs30 million on PBA and Rs25 million on each of the seven banks that allegedly formed the cartel and came out with an advertisement offering a product.

The CPP said the advertisement of PBA on behalf of seven banks gave a sense of cartel-like behavior, while the banks facing the allegations, were of the view that the products were offered to small savers with high return.

“We will explain to the CCP that it was not the cartel, instead, it was an effort to offer better return to the savers,” said Mr Manzoor.

He said if it would have been a cartel all banks should have shared the product offered by the PBA.

The banks, which witnessed a boom during the last four years and booked record profits, have been under serious criticism that they did not share the profits with the depositors.

The banking spread remained above 7 per cent during these years, which showed that banks did not share profits with the depositors.

Former prime minister Shaukat Aziz, who himself was a banker, slashed tax rate on banks from 53 per cent to 35 per cent during his tenure. It also helped banks to make more profits.

Asked what the banks would do if their appeal is rejected, the PBA president said he would discuss with the fellow banks again to decide the future line of action.

He said that an appeal would be filed with the CCP within a week. Along with the PBA all seven banks rejected the verdict and called it a ‘strange’ move against them.

Due to the boom foreign banks showed keen interest in the banking industry and a series of mergers and acquisitions took place during last couple of years, while more mergers are expected. Bankers believe that the economy still has a lot of potential for the baking business.