Complaints against Banks rise over 100pc, reveals SBP review

Complaints against Banks/DFIs/MFBs during past four years have increased from 774,656 in 2016 to 1,549,837 in 2019, showing a rise of over 100 percent revealed State Bank of Pakistan (SBP) in its review on Thursday.

The State Bank conducted a four year (2016-2019) review of complaints against Banks/MFBs/DFIs, to gain insights on the effectiveness of complaint management at banks.

The SBP was of the view that this increase can be attributed to improved visibility and access to dispute resolution mechanisms coupled with enhanced consumer awareness. Further, this is also due to the fact that the number and value of banking transactions have increased substantially. For instance, the volume and value of ATM/debit card transactions have increased by 101pc and 110pc respectively over the reporting period, said SBP.

The central bank further highlighted that the number of deposit accounts per ATM and per branch shows an increase of 62pc and 81pc respectively. Similarly, from 2016 to 2019, the volume and value of E-banking transactions have substantially increased by 112pc and 152pc respectively on account of 71pc increase in E-banking users.

Moreover, credit card related transactions increased from 18 to 39 million showing an increase of 118pc over a span of 4 years.

SBP was of the view that the increase in complaints over the same period can be witnessed as concentrated in ATM/Debit Card, Account maintenance, E- Banking and Credit Cards.

In terms of addressing the complaints, the resolution rate over the period 2016-2019 remained above 97pc at each year's end, said the central bank. The average time taken for resolution of complaints remained within regulatory turnaround times. However, delays were observed in sending acknowledgments, interim, and final responses.

SBP informed that banks being the first forum of redressal, have been handling 97pc and above of the total complaints of the industry while less than 3pc of complaints were escalated at higher levels including State Bank of Pakistan, Banking Mohtasib, and Pakistan Citizen Portal established by the Prime Minister Delivery Unit.

In order to boost the performance of complaint handling at banks and promote competition, SBP plans to further enhance the related disclosures which may include publishing of bank-wise complaint handling performance indicators in the near future by SBP.

Currently, banks themselves are required to give disclosure about the complaint management in their annual audited account for public information.