ISLAMABAD, Oct 24: A white paper issued by the Consumers Rights Commission of Pakistan (CRCP) has identified irritants in consumer financing of the banking sector in Pakistan.
These concerns generally range from misleading information, arbitrary procedures, unjustified tariffs, hidden charges, high differential in interest and profit rates, service inefficiencies, processing delays, unauthorized debits, to violation of agreed terms and conditions.
The white paper aims to highlight the concerns and problems being faced by the consumers of credit cards, auto leasing, house mortgages, personal loans, ATM, and other related services.
The paper would also bring to the fore the weaknesses and areas of improvement in the legal and regulatory framework that governs consumer financing in Pakistan. The study has been commissioned with the support of The Asia Foundation, Pakistan.
Secretary-General of the CRCP, Abrar Hafeez, said the unprecedented growth of the banking sector has given a flip to consumer products but has also raised public concerns.
Unfortunately, the number of consumer complaints about credit cards, personal loans and banking procedures is increasing day-by-day.
He said in the first eight months of the operation of Banking Ombudsman in 2005 (the latest available report is of 2005), about 40 per cent complaints filed with the Ombudsman related to consumer products, and among these complaints, 30 per cent were related to credit cards alone.
The white paper is envisaged to map public concerns and consumer grievances vis-a-vis variety of consumer products being offered by the banking sector. Moreover, white paper would focus legal and regulatory weaknesses that compromise transparent, just and fair consumer banking in Pakistan.
On the basis of background research and survey, the paper is aimed at providing researched evidence for designing and implementing strategic and practical interventions to strengthen the regulatory mechanism for addressing the grievances in consumer financing
Mr Hafeez pointed that the existing banking regulations did not capture the full range of problems being faced by the beneficiaries of consumer financing services. He quoted the example of Credit Worthiness Reports maintained by the Credit Information Bureau.
According to the SBP’s rules, these reports are confidential documents for borrowers, which amount to denial of right to one’s own personal information, he said.