Ombudsman : The Consumer’s Sentinel


By Fatima Naqvi

For someone who has frequently visited a bank branch (and has been made to wait) the notice board is often the only productive way to while away time until their query can be addressed. Often the notice board seems overwhelmed with circulars and announcements varying from branch timings to the acceptance and exchange of soiled currency notes. One such notice is that of the Banking Mohtasib.

The Urdu interpretation of Mohtasib is an arbitrator or more accurately an Ombudsman. Essentially, this is a person designated with the responsibility to resolve disputes in a conciliatory manner. These issues in most cases are between a bank and a customer or in some cases even between a bank and another.

The Role of an Ombudsman around the World:

The popularity and importance of the Ombudsman can be judged from the fact that currently, 25 countries have established this institution within their financial setup.  Since this an autonomous body, its decisions are considered to be fair and partial. It lends a voice to the customers and ensures that banks are extremely conscious of their responsibility as service providers.

An Ombudsman was first established in 1809 in Sweden. The importance of this role was further acknowledged when in 1974 the International Bar Association agreed on the following definition for an Ombudsman:

An office provided for by the constitution or by an action of the legislation or parliament and headed by an independent, high-level public official who is responsible to the legislature or parliament. Who receives complaints from aggrieved persons, officials and employees or who acts on its own motion, and has the power to investigate, recommend corrective action and issue reports.”

The UK banks association established a banking ombudsman in 1986. However, in 1999 a statutory UK Banking Ombudsman was established which incorporated the activities of eight private sector ombudsmen within the financial services sector. In India, the Banking Ombudsman was appointed in 1995.

Internationally, apart from the banking sector, other private sector ombudsmen have also been appointed in the fields of insurance, airlines, medicine, mass media, estate agents, legal services and, in a few countries, funeral services.

The Banking Mohtasib (Ombudsman) in Pakistan:

InPakistan, the Banking Mohtasib was established in May 2005. The main reason behind its establishment was the boom in consumer credit. During this time banks in Pakistan were aggressively pursuing the consumer lending strategy to build their Credit Card, Personal, Auto and Mortgage loan books. As is the case with consumer products, complaints from customers began to surface and gradually increase. With the burgeoning volume of dissatisfied customers, the State Bank of Pakistan and the Government opted to provide an independent complaint resolution mechanism to the people. For this purpose, the Banking Mohtasib was established providing free, impartial and prompt resolutions to customers’ complaints against banks.

Based on the core values of Responsiveness, Compassion, Flexibility, Trustworthiness and Transparency, the mission of the Banking Mohtasib is “As an independent statutory body established to resolve disputes between consumers and banks. It is our commitment to deliver free of cost, speedy solutions for all disputes referred to us in a manner that is impartial, fair and equitable to all parties.” 

Complaints Procedure:

It is very important for the consumers to be aware of their rights and the process to follow when they are seeking justice. The Banking Mohtasib does not function as a court, meaning the end customer does not have to hire a lawyer. Instead, there is a self-correcting method which is followed. In case the bank is unable to resolve the complaint initially, the customer may approach the Mohtasib and even if the Mohtasib’s decision is unsatisfactory to the appellant, he/she may take the matter to the court.

The Banking Mohtasib’s intervention on the following issues may be solicited:

  • Delays or fraud in relation to the payment or collection of cheques, drafts, or other banking instruments or the transfer of funds.
  • Fraudulent or unauthorized withdrawals or debit entries in accounts.
  • Complaints from exporters or importers relating to banking services and obligations including letter of credits.
  • Complaints from holders of foreign currency accounts, whether maintained by residents or non-residents.
  • Complaints relating to remittances to or from abroad.
  • Complaints relating to mark-up or interest rates based on the ground of a violation of an agreement or of State Bank directives.
  • Complaints relating to the payment of utility bills.

A simple 3-step procedure is followed to lodge a complaint:

Step 1:

The customer should first approach the bank in writing to resolve the particular complaint. The bank is allowed a maximum period of 45 days to resolve the complaint.

Step 2:

If the bank does not respond to the customer within the stipulated time frame OR the customer finds the response unsatisfactory, he/she may file a complaint with the Banking Mohtasib on the prescribed Banking Mohtasib complaint form which is readily available in all banks’ branches.

Step 3:

The complaint form duly completed, signed and attested should be attached to the original letter written to the bank and sent to:

Banking Mohtasib Pakistan

5th Floor, Shaheen Complex

M.R.Kiyani Road, Karachi

P.O Box # 604

Complaints can be lodged by businesses, individuals, banks or their employees. Each complaint can vary in terms of resolution depending on the level and depth of investigation required, but the Banking Mohtasib aims to revert to the complainant within a period of 60 days.

The Banking Mohtasib cannot entertain complaints against the following:

  1. The State Bank of Pakistan
  2. Microfinance Banks
  3. Investment Companies
  4. Investment Banks
  5. Insurance Companies
  6. Mutual Funds Companies
  7. Venture Capital Companies
  8. Leasing Companies
  9. Development Financial Institutions (DFIs)
  10. Housing Finance Companies
  11. Overseas branches and Subsidiaries of Pakistani banks
  12. NIT


Effectiveness of the Banking Mohtasib:

The complaint process for a banking customer to approach the Banking Mohtasib is indeed laudable. This self-correcting procedure (as mentioned above) gives a sufficient window of time to banks to resolve the complaints. Not only does this put the onus on the bank but also enable effective filtering of the more complicated issues to be forwarded to the Banking Mohtasib only. The priority of the banks is to minimize the escalation of complaints to the Banking Mohtasib and in a number of banks this forms an integral part of the Key Performing Indicators (KPIs) of the service staff.

Although the Banking Mohtasib has now matured into an integral institution of the banking sector (functioning for over six years), it is necessary for it as an institution to increase awareness about its role to the consumers. At present, it is mandatory for banks to prominently display a detailed outline of the procedure of lodging a complaint with the Banking Mohtasib. However, there is no active engagement of customers (especially the disgruntled ones) from the banks’ end to educate them about their rights.


No one can deny the global success of this institution however it needs to reach out to the people. Perhaps an infomarketing campaign especially targeting the less educated mass of bank consumers should be rolled out. Presently, the Banking Mohtasib is like a watch dog in slumber. It is important to make people aware of this free-of-cost complaint option available to them so that its reach and its strength as an institution can be garnered for the benefit and protection of the masses.


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