Banks to use fair treatment framework for customers

KARACHI: The State Bank of Pakistan (SBP) has launched a conduct assessment framework (CAF) to promote the concept of responsible banking among financial institutions with regard to fair treatment of customers, a circular said on Friday.

The  State Bank of Pakistan directed banks to adopt the framework from January 1 next year, and they would be required to undertake its assessment as of December 31 on an annual basis.

The purpose to quantify conduct was to develop a periodic, reliable, diagnostic and comparable mechanism which would help banks to deliver their commitment to fair treatment of customers (FTC) in an optimum manner and manage their conduct risk.

The SBP has rebranded consumer protection as a success proposition for banks rather than being a compliance issue and has ensured adoption of self conceived fair treatment of customers frameworks by the banks.

Banks need to continue to monitor their adherence on an ongoing basis and demonstrate how culture, strategies and controls deliver fair treatment to their customers through the fair treatment of customers framework.

However, the effectiveness of the self conceived fair treatment of customers framework to avoid or manage conduct risks needs to be continuously checked, implementing fair treatment of customers was merely a statement of intentions.