Banks planning to open 800 new branches
No let-up in consumer woes as expansion programmes continue,banks avoiding rural areas despite SBP directives
Wednesday, February 20, 2008
By Shahzad Anwar
KARACHI: Banks are planning to add 800 more branches in their network during this calendar year that may create 10,000 to 12,000 thousand fresh job opportunities, a knowledgeable banking source said. Last year banks had opened 1,000 new branches.
Banks are also planning to increase their customer base and are estimating lending to one million more borrowers. Currently banks have around six million barrowers. According to SBP’s regulations it is mandatory for banks to open 20 percent of their new branches in rural areas but regrettably the banks least care about these regulation and prefer to open new branches in main cities and towns instead of rural areas.
In last few years the financial sector grew rapidly and consumer financing also expanded manifolds. With expansion of banking sector and subsequent surge in consumer financing the different cases in which consumers’ rights were exploited badly also appeared on the surface. But unfortunately consumer protection laws could not be devised accordingly.
However, Complaint Division of State Bank of Pakistan (SBP) was entertaining such banks’ victims. “SBP takes serious action against such banks which are found exploiting consumers,” a senior official at SBP told The News. But he said that as per policy central bank does not interfere in cases which are under trial or sub-judice.
“There are six million borrowers in Pakistan of which SBP receives only four thousand complaints per annum which are very low as compared to total number of borrowers,” the official said.
The Banking Ombudsman court is another forum which hears complaints against banks and provides justice to affectees, but it is very unfortunate that majority of such cases in which consumers’ rights are exploited are not reported at any of the two forums. Moreover, the legislators also failed to protect rights of consumers’ through legislation of proper consumer protection laws. The Automatic Teller Machine (ATM) the basic automated banking service has become popular in the country in last few years. The ATM enable banking customers to excess their accounts 24 hour in 7 day, but underneath this facility there are some sinister problems which are shaking trust of ATM users.
The fake, damaged and written over currency notes doled out to customers by ATM machines is another problem among other numerous daily basis technical issues such as network connectivity and lack of currency notes to dispense.
A customer narrating his saga said, “On Feb 12 at around 11 am I withdrew Rs7,000 from an ATM in Clifton and proceeded to pay several bills. At one of these places, the cashier refused to accept a note of Rs500, which he said had a line on the Quaid’s face written in ink. Despite insistence he said that he could not accept the note. I then went to my bank and asked them to replace it. I did not think it would be a problem because a bank’s ATM had given me the note and commercial banks are legally bound to replace soiled or damaged notes.
However, to my surprise I found that the bank could not replace the note. I told them that their own ATM had dispensed it but to no avail and as for replacing soiled or damaged notes, a senior official at the branch said that the note was neither, I asked him what it was and he did not give me clear enough reply. He also said that if the note was torn the bank could have replaced it, to which I asked him should I tear it, to that also, he gave no reply. I am stuck with a note that nobody not even the bank who’s ATM issued it will accept.”