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Wednesday, August 4, 2021

Toxic financial flaws in banking, SOPs must be quarantined immediately

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Islamabad: National Traders Alliance on Thursday said the banks are behaving like cartel and robbing depositors as well as borrowers. Banks and other financial institutions have a crippling effect on trade, commerce, industry and national savings. Developing countries like Pakistan cannot afford such luxuries which has seriously endangered the economic competitiveness. Speaking at a meeting, Malik Sohail Hussain, VP, National Traders Alliance and former Sr. VP of ICCI said that recent financial crisis in the US that has now gripped the whole world is result of the greed of financial. He said that US, EU etc have no option but to print money that would result in a sharp surge of inflation and depreciation of dollar.

Traders seriously considering boycotting banks; not to accept credit, debit cards at outlets
He said that banks should mend their ways that are compelling traders to boycott all dealing with these institutions and reject all credit and debit cards at outlets and insist on cash transactions. Malik Sagheer Ahmed, President Blue Area Traders Association, Asad Rashid, Shahid Alam, Amin Pirzada, Yusaf Rajput, Shakil Aziz and other business leaders said that lethal financial flaws must be quarantined and Standard Operating Procedures should be revisited before it is too late.

Its time for action as a top government official has also accepted the fact that some banks are involved in flight of capital from Pakistan, he said. Like US, UK etc, banking is the most profitable sector which is second only to narcotics trade, they said adding that its 14.5 percent growth is detrimental for economy. They said high interest rates and different charges are at the disadvantage of the customers despite the fact that depositors are partners of the banks and that the SBP has powers to control these damaging practices.

Lack of customers’ education makes country a goldmine for greedy bankers
Banks are earning huge profits at the cost of depositors and borrowers. The State Bank should determine a reasonable rate of returns for depositors as well as banks according to the practices in other neighbouring countries.

“Costly loans have reduced the loan-servicing capacity of borrowers triggering new challenges. Complaints are increasing due to high difference between lending and deposit interest, unauthorized debts, non-compliance, processing delays, service inefficiencies, hidden charges and poor disclosure practices,” said Malik Sohail Hussain. He said that lack of consumer education on banking terms and conditions, policies, rules and regulations is also a critical factor in securing financial rights.

Malik Sohail said, “Credit cards, BTF, leasing, personal loans and other products is a serious issue as banks get hidden charges and cheat customers one-way or other,” adding that supplementary cards is another way to relieve customers of their hard earned money.

He said that plastic card users have been losing millions of rupees daily in the name of late payment, outstanding charges and transaction charges. In some cases it is imposed before activation of cards. ”Despite very high interest rates from 40 to 45 per cent per annum, the credit cards created mess for millions resulting in penalties to customers,” he said. Most of the banks issuing credit cards are fleecing customers and majority of sales representatives who promote credit cards are involved in misguiding the customers.

Hundreds of young boys, girls busy in painting deceptive picture
The sales force use to offer cards free of charges and no membership fee but the bills carry dozens of charges. Hundreds of young girls and boys are involved in promotion of cards by painting shoddy picture. These deceptive activities continue for years but no authority has taken any notice. “SPB is supposed to safeguard the interests of people.”

Malik Sohail said that charges on credit cards are so high that even if the default rate becomes 50 per cent, banks would get good profits. Banks should provide relief to small traders otherwise small traders will stop dealing with these loan sharks and would not accept credit and debit cards at their outlets.-National Traders Alliance

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