Banks given advice: State Bank against discriminatory lending

The State Bank of Pakistan (SBP) on Monday advised banks to desist from adopting discriminatory practices in providing consumer finance. On the complaints of politicians, SBP has issued these directives through a BPRD Circular Letter No. 14 of 2017. In continuation to its earlier instructions, State Bank has advised banks/development finance institutions (DFIs) not to discriminate any segment of society. Previously, banks / DFIs were asked 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 and law enforcement agencies etc.
However, despite that some complaints were received against banks that they are still not providing financing facilities and refusing the cases without quoting any reason.
According to circular, "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. Such practices are against the spirit of fundamental rights ordained by the Constitution of Pakistan and regulatory instructions on the subject. This has been viewed seriously."
The circular also said: "Accordingly, SBP has advised banks/DFIs not to discriminate any segment of society and follow the instructions issued regarding the matter in letter and spirit. SBP has further advised that henceforth banks / DFIs will explicitly convey reasons of refusal in writing to the applicant and keep a separate file of all approved and rejected cases of PEPs. "Any violation of the above instructions shall attract punitive action under the relevant provisions of Banking Companies Ordinance, 1962."
It may be mentioned here that SBP in its previous instruction advised all banks/DFIs to put in place an internal mechanism for speedy handling and efficient resolution of grievances/complaints against such discriminatory practices. Banks/DFIs were asked to nominate a focal person at senior level for coordinating with aggrieved customers and attending their complaints. Similarly, a special unit of the Consumer Protection Department (CPD) of SBP will look into the issues not resolved by banks/DFIs.