Pakistan has established an institution of Banking Mohtasib (Ombudsman) following an amendment passed by the federal government into the country's banking laws.

Banking specialist Azhar Hamid has been appointed as head of the new institution, which will investigate complaints of all kinds, including those involving letters of credit (L/Cs).

Public dissatisfaction

According to State Bank governor, Ishrat Hussain, the decision to establish a banking ombudsman responds to public grievances that service levels and product knowledge amongst bank staff had not kept pace with developments such as privatisation and liberalisation of the banking sector.

These failures to keep pace he said had resulted in customer dissatisfaction and a larger number of complaints.

Under pressure

The establishment of the banking ombudsman also seems to respond to pressure on the State Bank that does not appear to have the capacity to look into the growing number of complaints.

Hussain concedes that while the State Bank was processing large numbers of complaints, still the general public was not satisfied with its pace and felt the central bank favoured banks over their customers in most cases.

Ombudsman's mandate

The ombudsman has been empowered to look into complaints about failures to act in accordance with banking laws and regulations, including policy directives or guidelines issued by the State Bank of Pakistan.

The institution will investigate delays or fraud in relation to the payment or collection of cheques, drafts or other banking instruments or funds transfers, fraudulent or unauthorised withdrawals or debit entries in accounts and complaints from exporters and importers relating to banking services and obligations including L/Cs.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.