Federal government and the banks were now planning to offer long-term consumer and house financing loans on a fixed rate basis

Apr 10 - 16, 2006

Banking Ombudsman Azhar Hamid has said that his office was receiving most of the complaints of the banks' customers against consumer financing.

Credit cards and auto loans are the two products of consumer financing that are leading in complaints, being received by Banking Ombudsman office in the country.

"We have received more than 900 complaints from May-December 2005 against scheduled banks and 40 per cent of the total complaints belonged to the consumer financing, especially credit cards and auto loans," he added.

Banking Ombudsman Azhar Hamid has disclosed this in an interview to PAGE.

Mr. Hamid is a veteran banker who has accepted the task of Banking Mohtasib (Ombudsman) since May 2005, after getting retirement in 2003. He has served on a key position in Grindlays Bank for many years that has been merged into Standard Chartered.

He has also disclosed that rising mark up and inordinate delay in the delivery of cars, financed by banks, was also irritating the customers of the banks.

He said that his office was receiving complaints against all the domestic banks, who were engaged in consumer banking in the country.

He maintained that the consumer financing has been growing at a very fast pace because of a cut-throat competition among banks and availability of surplus equity, but the banks have not streamlined their systems to meet the challenges of fast-growing consumer banking in Pakistan.

He pointed out a classical case where a domestic bank has imposed fine to a credit cardholder, who not deposit bothered to deposit 11 paisa along with the minimum required payment.

It seemed unbelievable and funny but it was a fact that most of the banks were imposing fine to the credit cardholders, who do not deposit a few paisas along with the minimum monthly payment of their credit cards, he added.

"We took up this stunning case with the relevant bank and provided relief to the complainant," he said.

After observing this drawback the Ombudsman Office had requested the State Bank of Pakistan to direct the scheduled banks not to mention paisa in the credit card bills and just mention the round figure of amount like the government departments, especially PTCL and WAPDA," said Mr Hamid.

He said that by law the role of his office has been restricted only to the 39 scheduled banks in the country.

He also pointed out another important example, where a farmer was facing harassment from bank in spite of the fact that he has deposited the entire remaining amount of loan.

It was, in fact, a computer mistake of the bank that was causing embarrassment to the farmer.

The Banking Ombudsman office raised this issue with the bank and produced the receipt of loan paid by the borrowers as a result the bank not only accepted its mistake, but settled the case once and for all, he added.

"On our query the same bank informed us that there were 94 similar cases where the payments by borrowers (farmers) were not computerized and the farmers were being served with notices for the recovery of loans," said Mr Hamid. The cases of 94 farmers have also been settled on the intervention of the Ombudsman office, he added.

Regarding rising mark up, he said that his office was not authorized to ask the banks to bring down interest rate and it was the outcome of demand and supply.

Three years ago the interest rate remained below 5-6 per cent and the borrowers were happy with the consumer banking, etc., but now the mark up rate has gone up to 15 to 16 per cent because of increase in demand of credit.

He pointed out that several borrowers were facing problems who have obtained loans and consumer products at 6-8 per cent three years ago and now they were paying up to 15 per cent mark up because of their agreements with the banks regarding fluctuation in mark up rates.

Had the borrowers taken loans and products on fixed rates, they would have not been facing the problem of increase in interest rate now, he said, adding the fault also lied with the borrowers who have accepted loans, based on fluctuation in mark-up.












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He said that the federal government and the banks were now planning to offer long-term consumer and house financing loans on a fixed rate basis.

To a question about delay in cars' delivery, he said that the issue was beyond the jurisdiction of his office.

"Neither banks nor the Ombudsman can take any action against the private car manufacturing companies, but I know that the government and manufacturers have increased production and reduced the delivery period".

He said that increase in mark-up on car financing has annoyed the borrowers, but it was the result of agreement between both the stakeholders.

He said that the Banking Ombudsman was launching soon the first annual report for the year 2005 (from May-Dec period), wherein details of the complaints, their nature, names of the banks and recommendations would be mentioned clearly.


Lahore Chamber of Commerce and Industry (LCCI) have joined hands with UK-Pak Chamber of Commerce and Industry for the promotion of business activities between the two countries.

Both the chambers have recently inked MoU in this regard in presence of a large number of businessmen from both sides.

LCCI President inked the MoU on behalf of Lahore Chamber of Commerce and Industry while Mr Samiullah Khan represented UK-Pak Chamber of Commerce and Industry. LCCI Senior Vice President Abdul Basit and Vice President Aftab Ahmad Vohra were also present on the occasion.

The President UK-Pak Chamber of Commerce and Industry Mr Samiullah Khan were leading a delegation of 15 businessmen belonging to various trades and sectors. As per MoU both the chambers would work together for improving trade, commerce & economic relations between the two countries. Both the sides would adopt new strategy for exchange of information relating to their respective markets.

The Memorandum would help facilitate exchange of trade delegations between the two chambers. Both the chambers would now work hand in hand for identification of obstacles in the way of trade and economic cooperation. Lahore Chamber of Commerce and Industry and UK-Pak Chamber of Commerce would also launch joint research operations for exploring possibilities of trade and investment.

Speaking on the occasion, Mr Samiullah said that the MoU would go a long way in bringing in British investment in Pakistan. He said that Britain was not a new destination for Pakistanis as most of the businessmen had already experienced different facets of it. In his speech, the LCCI President Mian Shafqat Ali threw light on various issues need to be tackled on priority basis for the promotion of trade and investment.

He termed this event as a historic. He said that the world was squeezing in to a global village and export-led growth model is being adopted as a strategy for growth of economies all over the world, no economy can grow in isolation. Active engagement of the business community, frequent exchange of economic and trade delegations to identify the areas of mutual interest, arranging of single country exhibitions and exchange of information between countries are considered to be effective tools of growing together.

The LCCI President said that there has been progressive increase in the trade between Pakistan as exports to UK registered an increase from $580 million in 1999-00 to $893.5 million in 2004-5. Pakistan's major exports to U.K. consist of cotton yarn, textile products, fish, sports goods, rice, leather & leather products, fruits & vegetables.

On the other hand, U.K's exports to Pakistan had also increased from US$ 356 million in 1999-00 to US$ 532.1 million in 2004-5. Major imports from U.K. consist of industrial machinery, power generation machinery, pharmaceutical products, chemical materials, iron & steel, telecommunication appliances & equipment, professional instruments etc. There is a greater need to enhance the trade between the two countries.

Talking about Foreign direct investment, the LCCI Senior Vice President Abdul Basit said that it had marginally increased from $ 169 million in 1999-00 to US$ 181.5 million in 2004-5. He said Pakistan's foreign investment policy had been characterized with liberalization, deregulation and privatization.