The State Bank of Pakistan (SBP) has barred commercial banks from undertaking some specific foreign trips. Sources told Business Recorder on Sunday that SBP has also called a meeting of the heads of the commercial banks at SBP head office Karachi today (Monday) to discuss various issues including foreign trips.
SBP has placed a ban with immediate effect on all bank staff against undertaking foreign pleasure trips of some particular nature. This includes trips arranged by 3rd parties (banca), trips arranged by bank from the commission earned from 3rd parties and trips by bank to its staff on achieving the business targets, they informed.
Abid Qamar Chief Spokesman State Bank has also confirmed that the SBP has banned some specific foreign tours. "Yes, the SBP taking a regulatory step has restricted banks from some particular foreign tours," he added.
He said that governor State Bank Ashraf Mahmood Wathra will convene a meeting of commercial banks today (Monday) to discuss the various issues but not limited to foreign trips. Governor SBP will also address the presidents of commercial banks, he added.
Sources said that SBP has also asked banks for submission of details of the foreign trips. In the light of these directives issued by the SBP, United Bank Limited (UBL) has also cancelled its foreign tour being held in Bangkok, they added.
They informed, reportedly, UBL trip was being managed by using bancassurance funds and after SBP directives it has cancelled the tour.
Sources in banking sector informed that commercial banks in the name of Selling Banc assurance (selling insurance plans from bank's counter) plan to their customers are charging a very high commission of up to 50 percent from their initial saving plan contributions.
Most of the cases mainly the customer not aware of this situation and if after few months the customer wants to withdraw his investment or shows inability to continue with the saving plan, they are informed that either you will not get any amount back (as all funds are already distributed) or he is left with less than 10 percent to 25 percent of the amount.