Consumer Protection


Financial products and services play a crucial role in enabling consumers to build their financial resilience, seize opportunities, and meet essential needs. However, consumers also face a range of risks when engaging with such financial offerings. State Bank of Pakistan (SBP) recognizes Consumer Protection as a critical regulatory agenda that directly contributes to Financial Stability. In addition to prudential supervision, SBP places significant emphasis on monitoring business practices and conduct of REs' (i.e. Banks/DFIs/MFBs/ECs/EMIs) to safeguard the interests of their customers. To promote Fair Treatment of Customers (FTC), enhance disclosure, ensure transparency, and strengthen the effectiveness of the FTC regime, SBP has established a dedicated department for Conduct Supervision called Consumer Protection Department (CPD).

The objective of the Consumer Protection Department is to enhance Consumer Protection and foster sound market behavior through effective and efficient oversight of REs’ conduct. The department is committed to providing protection to banking consumers in line with international standards by implementing robust and effective conduct supervision through supervisory tools, and assessment frameworks. It also aims to achieve transparency, better disclosure, encourage competition in the marketplace and promote fair practices.

CPD's mandate is to strengthen FTC while promoting responsible banking conduct through effective and efficient oversight. This includes collecting, analyzing, and profiling conduct data of Regulated Entities (REs), implementing the conduct supervisory framework in line with global trends and local needs, facilitating consumer redressal of grievances against REs in accordance with applicable legal frameworks, and engaging with relevant stakeholders to supplement conduct supervision and consumer protection.

The core functions of the department are as follows:

Conduct Monitoring & Supervision:
CPD is mandated to collect periodical data on the conduct of REs through various market monitoring tools, including media monitoring, market intelligence, mystery shopping, on-site inspections, offsite assessments, and regulatory returns. The data collected is meant to be used to conduct micro and macro-level assessments to implement corrective measures when needed. These measures may include warnings, penal actions, consumer compensation and improvement plans for REs. The primary objective of this function is to assess and reinforce compliance with FTC regulatory requirements and expectations.

Facilitating Complaint Resolution:
SBP considers an effective and efficient consumer complaints redressal mechanism within the industry as a vital indicator of a well-functioning FTC regime. To this end, it has established minimum rules for Internal Dispute Resolution (IDRs) mechanisms within REs through the issuance of the 'Consumer Grievance Handling Mechanism.' Additionally, the Banking Mohtasib Pakistan (BMP), a quasi-judicial forum empowered by the Federal Ombudsman Institutional Reforms Act (FOIRA) 2013, resolves disputes between consumers and banks as the second line of defense for complaint redressal. Since the BMP scheme does not cover MFBs, SBP serves as the second forum for redressal for MFBs’ customers only.

While monitoring CGHM (Consumer Grievance Handling Mechanism) is a key priority of the conduct monitoring & supervision function, it is equally essential to guide and facilitate customers of REs towards the right redressal forum, provided by the redressal division of the department. Additionally, this function is responsible for resolving complaints eligible for handling under the relevant legal and regulatory framework. It is important to note that SBP as a matter of policy does not intervene in service-related disputes and matters pending adjudication before the competent court of law.

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