SBP plays a key role in facilitating consumer complaints in the use of banking services

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The State Bank of Pakistan (SBP) is the main regulator of the financial and banking system. As such, SBP has not only played an important role in strengthening the country’s financial system by proactively adopting a monetary stance, but it has also taken many steps to help consumers enjoy banking services.

This era witnesses the evolution of finance and technology which led to the formation of fintech institutions. As a result, we have experimented with many innovative products that offer great added value and efficiency.

However, the development of such products has led to complex challenges from a consumer protection perspective. This necessitates the increased role of financial regulators to diligently address consumer protection challenges and enact appropriate regulations to ensure that consumers are protected to reap the benefits of the fintech revolution.

It is imperative to have a robust and efficient compliant handling tool. In the case of Pakistan, people have various problems with the use of banking services in general and the technological revolution has further added complexities. Therefore, the importance of an up-to-date consumer protection regime cannot be overstated.

The State Bank of Pakistan (SBP) has taken numerous measures and issued regulations with the aim of promoting fair treatment of consumers and tackling consumer grievances regarding the use of financial services in the country.

The SBP has directed all banks, microfinance banks and development finance institutions to ensure that they have a robust mechanism for handling consumer complaints. Emphasis was placed on the effectiveness of consumer complaint handling mechanisms, as it remained a dilemma in Pakistan that a complaint takes several months to be resolved.

SBP has currently revised the complaint handling mechanism that is currently present in financial institutions.

The review is based on “ease of filing” and “prompt and fair handling” of complaints. After thorough analysis, SBP has issued a new set of instructions to all banks, DFIs and MFBs. These instructions have made it essential for all financial institutions to ensure mandatory complaint channels and emphasis has been placed on availability and accessibility. These are primarily call centers, email, electronic forms, surface mail, faxes and complaint boxes/registers.

Along with this, banks can invest in modern modes of complaint filing, including the use of smartphones, mobile apps, self-service kiosks and other social media platforms.

It was also advised by SBP that financial institutions should invest in the necessary technological framework to improve the consumer experience and invest in human capital development to better manage consumer complaints. Along with this, SBP recommended that banks, DFIs and MFBs ensure that consumers have access to the complaint tracking system to improve efficiency and strengthen the overall consumer protection regime.—INP

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