Financial consumer protection is one of the important policy objectives pursued by central banks and financial regulators around the globe. There is growing consensus amongst global policy makers that achieving financial inclusion and stability hinges on enhancing the consumers’ confidence in the financial system. With the emergence of globalization, technological advancement and financial innovation, consumer protection has become even more challenging in today’s financial world.
The financial landscape of Pakistan has transformed significantly over the years. This transformation has allowed new and more efficient delivery and processing channels as well as more innovative products and services in the financial market. However, the development of diversified financial products has also given rise to various disputes, misunderstandings and dissatisfaction among financial consumers. In order to safeguard their interest, the State Bank of Pakistan (SBP) has intensified regulatory oversight on consumer protection related issues. For the purpose, a dedicated Consumer Protection Department (CPD) was established in 2008. However, in line with SBP’s vision 2020 to gradually retrench from complaints handling and to focus on conduct regulation and supervision, the name of CPD has been changed to Banking Conduct & Consumer Protection Department (BC&CPD). With the strategically enhanced role to regulate business conduct of banks and to ensure that consumers get fair & transparent banking deals, an understanding has been developed with the Banking Mohtasib Pakistan (BMP) that complaints received by SBP, which require detailed investigations will be gradually routed to them. However, the issues requiring urgent action may continue to be handled by BC&CPD. Towards this end, BC&CPD is striving that financial service providers have competitive frameworks, responsible marketing & lending practices, and adequate complaint handling and redress mechanisms to safeguard the vulnerable segment of consumers.