KARACHI: The State Bank has advised banks and development finance institutions (DFIs) not to discriminate against politically exposed persons (PEPs) and has created a special unit to handle grievances against such cases.
The central bank on Thursday issued instructions to all banks and DFIs informing them that the SBP has been receiving complaints from various quarters regarding discrimination on the basis of high-risk category of customers identified by banks as PEPs.
A Special Unit in the Consumer Protection Department (CPD) of SBP has been created for handling grievances against such discriminatory practices. The CPD Unit will monitor and handle complaints which remain unresolved by banks’ internal procedure.
Banks have a long list of customers who are not entertained particularly for loans or car leasing. These include police personnel, journalists and all those who could have an influence in the government machinery.
The list is never disclosed and while the banks do not refuse flatly, they instead delay the process and eventually close the applications without a particular reason.
On August 19, 2008, the SBP has issued instructions prohibiting discrimination on the basis of specific occupation, trade, region, gender and other factors while providing financial services in normal course of business.
In its notification issued yesterday, the SBP reiterated that banks and DFIs should not discriminate against any customer merely on the ground that he/she belongs to a particular category of customers.
The SBP did not mention others who are discriminated except for the PEPs.
The State Bank also advised all banks/DFIs to put in place an internal mechanism for speedy handling of such complaints and nominate senior officers for dealing with complaints and issues related to PEPs and for coordination with the central bank in the matter.