Mohtasib for improving internal banking controls

The Banking Mohtasib Pakistan on Wednesday urged for improvement in internal controls of banking system and essential service standards for a healthy and vibrant banking culture in the country.
While unveiling 6th Annual Report for the year 2010, Banking Mohtasib Mansur-ur-Rehman Khan said that there is an alarming increase, of 13 percent, in complaints category of 'Frauds' over the comparative figure in 2009, with most of these complaints relating to parallel banking and misappropriation of funds.
"A clean separation from bank service allows the delinquent employee to work in another bank and create a potential for further frauds there," he said. A database of such tainted ex-employees maintained with Pakistan Banks' Association, he observed, can help prevent repetition of frauds and promote consumer confidence in the banking system, provided banks are instructed to refer to it before appointing any person, he said, adding a proposal by the secretariat has already been forwarded to State Bank of Pakistan in this regard.
According to the Report, total number of formal complaints received by Banking Mohtasib Secretariat stood at 1047 in 2010 as against 1608 in 2009. However, the combined effect remained almost equal in both years as the informal complaints, which relate to trivial matters and are not submitted as per the procedure laid down in the law, rose from 1615 in 2009 to 2138 in 2010.
In terms of complaint disposal, 35 percent of total complaints received were granted; another 38 percent declined; and 17 percent were rejected, while 10 percent were reported pending at the year-end.
The Banking Mohtasib said that formal hearings were held not only at regional offices but also in other major cities of the country during the year in order to speed up the process of complaint resolution as well as save the complainants from the inconvenience of travelling to far off destinations.
Internally, the policies and procedures were reviewed in 2010 to identify opportunities and improve the complaints resolution process, he said. In this regard, the number of days taken to resolve a complaint was reduced from an average of 326 days in the year 2009 to 101 days in the year 2010, he added.
"Today, it stands at an average of 53 days. However, efforts are underway to reduce it further to a period of 45 days", Mansur said. About complaint resolution process, he said that the aim is to facilitate resolution through an amicable process of reconciliation and where such mediation is unsuccessful, the issue is analysed and the concerned bank presented with findings and recommendations on how best to settle a dispute.
Overall, Banking Mohtasib issued orders directing banks to pay a total amount of Rs 132,911,570 to the complainants during 2010, he added. In addition to different case-studies which provide an idea of the nature and scope of work involved, the report briefly cites some specific cases on service culture.
These cases highlight the indifferent approach adopted by the concerned bank towards the complaint resolution process, with little effort to investigate the core issue. The annual report also includes analysis of some of the systemic deficiencies and control weaknesses in banks which were confronted during the course of investigations in 2010, Banking Mohtasib concluded.