Some bankers are openly refusing to provide banking services to politicians, policemen, media persons and lawyers in spite of repeated warnings by the central bank in the past against doing so.

Commercial banks continued to show discrimination to customers based on their identification details, ensuring that some of them won’t be provided loans and credit card services. The move was justified by the banks over failure to recover their dues from certain quarters.

Some bankers believe that these people either will not cooperate with bank officials or create a problem for them by abusing their powers and authority. Hence, rather than offering them services, many bankers categorically refuse to offer them services especially personal loans, auto financing, and housing finance.

Given some past incidents, the bankers have learnt how certain customers could not be pressurized into paying their loans on time because they faced legal actions or threats from influential quarters.

However, their behavior also tends to discriminate other deserving and honest people who belong in the same professions. They are also being made victims due to the blacklist maintained by bankers.

Besides people belonging to certain professions, customers who reside in suburban areas are also being refused banking services.

Despite the rise in complaints, the central bank seems reluctant to act, when interest rates are at a record low and consumers financing is on the rise.

State Bank of Pakistan’s Response

This is what SBP states regarding the provision of banking services to Pakistani citizens:

Banks/DFIs must desist from adopting discriminatory practices on the basis of trade, region, gender, ethnicity, specific profession, class and/or group of citizens e.g. lawyers, politicians, security officials and law enforcement agencies etc.

Politically Exposed Persons (PEPs) have time and again raised their concerns regarding the adoption of such 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, the statement further said.

Banks/DFIs are advised not to discriminate any segment of the society and follow the instructions issued regarding the matter in letter and spirit. It is 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, SBP order stated.

SBP warned that discriminatory behavior of banks with customers will lead to punitive action against the violator under the relevant provisions of Banking Companies Ordinance, 1962.

However, the central bank did not take any punitive action to stop such discriminatory practices at banks. These practices are not only widespread in small cities but these are even common in the metropolis.

SBP issued a warning to the banks twice in August 2008 and September 2015 but banks are reluctant to obey the central bank with true letter and spirit.

Please refer to BPRD Circular Letter No. 21 dated August 19, 2008 and Circular Letter No. 27 dated September 2, 2015 which interalia require banks/DFIs to desist from adopting discriminatory practices on the basis of trade, region, gender, ethnicity, specific profession, class and/or group of citizens e.g. lawyers, politicians, security officials and law enforcement agencies etc.

In this context, PEPs have time and again raised their concerns regarding the 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.

Accordingly, banks/DFIs are advised not to discriminate any segment of the society and follow the instructions issued regarding the matter in letter and spirit. It is 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.