SBP advises banks on consumer finance practices

KARACHI: The State Bank of Pakistan (SBP) has advised the banks that politically exposed persons (PEPs) have time and again raised their concerns regarding adoption of discriminatory practices by banks in providing consumer finance and general banking facilities, a circular said on Monday.

The central bank has also asked the banks and development finance institutions (DFIs) to explicitly convey reasons of refusal in writing to the applicant and keep a separate file of all approved and rejected cases of politically exposed persons.

Such practices are against the spirit of fundamental rights ordained by the Constitution of Pakistan and regulatory instructions on the subject and that these complaints have been viewed seriously at the central bank of the country.

The  State Bank of Pakistan has further stated in the circular that any violation of the instructions will attract punitive action under relevant provisions of Banking Companies Ordinance, 1962.

In continuation to its earlier instructions, the State Bank of Pakistan has advised the financial institutions not to discriminate any segment of the society and follow the  State Bank of Pakistan instructions issued earlier, which required banks /  development finance institutions to desist from adopting discriminatory practices on the basis of trade, region, gender, ethnicity, specific profession, class and / or group of citizens, eg, lawyers, politicians, security officials, the law-enforcement agencies, etc.