Banking Conduct plays an important role in building consumer confidence, which is fundamental to the stability and efficiency of the banking sector. Irresponsible business conduct can undermine the confidence of the public in the banking sector. Given the adverse consequences for financial stability, irresponsible conduct needs to be addressed proactively.

Accordingly, guidelines on prohibited conduct have been developed in line with the best international practices which will help in bringing more clarity on regulatory expectations on business conduct besides complementing the existing SBP instructions issued from time to time.

The guidelines have been categorized in the following five areas:

1. Misleading conduct.
2. Undue influence & pressure.
3. Demand of undue considerations.
4. Collusion to fix features in the products/services to the detriment of consumer.
5. Complacency not to invest in systems and procedure, HR, consumer awareness, etc.

All banks/MFBs/DFIs are advised to incorporate the same in their FTC framework by March 31, 2019 as per their scope of operations. It is expected that the banks will review their existing products and processes in the light of these guidelines and ensure its monitoring through adequate controls. Besides, banks shall also undertake adequate awareness measures to educate their staff and consumers about prohibited banking conduct.

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Annexure: Guidelines on Prohibited Banking Conduct