KARACHI: Pakistani banks score high on average for their anti-corruption policies but perform poorly on human rights policies, according to a policy assessment conducted by Fair Finance Pakistan, a coalition of civil society bodies, think tanks and advocacy groups that seeks to strengthen the commitment of financial industry to environmental, social and human rights standards.

Its findings are based on the disclosure of publicly available policies on human rights and corruption by five leading commercial banks namely Habib Bank Ltd, MCB Bank Ltd, Meezan Bank Ltd, Allied Bank Ltd and National Bank of Pakistan Ltd.

Banks were rated on a scale of zero to 10, with zero being the least desirable score. The assessment was based on Fair Finance Guide International (FFGI) methodology, which observes compliance with international standards for responsible business practices and has been conducted in over 20 countries across Asia, Africa, Latin America and Europe.

Habib Bank Ltd scored the highest average of 4.2 out of 10, followed by MCB Bank Ltd at 3.3. Meanwhile, Meezan Bank Ltd, Allied Bank Ltd and National Bank of Pakistan Ltd scored an average of 2.5. Results show all five banks have well-defined policies on disclosing bribery and implementing anti-money laundering measures. All banks, except Allied Bank Ltd, have set up mechanisms to verify the ultimate beneficial owner(s) of the companies they finance.

Habib Bank Ltd stands out among the assessed banks for implementing specific safeguards while dealing with politically exposed persons whether through direct or indirect business relations.

However, none of the banks provided any disclosure related to the companies they invest in or finance that can expose them to various environmental, social and governance risks.

In human rights policies, Habib Bank Ltd scored an average of 0.7 out of 10, followed by MCB Bank Ltd. Meanwhile, Allied Bank Ltd, National Bank of Pakistan Ltd and Meezan Bank Ltd scored almost nil.

Banks do not fully comply with the United Nations Guiding Principles on Business and Human Rights, the assessment said. However, four of the five banks, excluding Meezan Bank Ltd, have declared a zero-tolerance policy towards discrimination in employment and occupation. Allied Bank Ltd and National Bank of Pakistan Ltd policies were found to be lacking in addressing all aspects of gender, race, ethnicity and physical ability. None of the banks has disclosed information on human rights policies concerning the companies they invest in or finance.

Published in Dawn, September 24rd, 2023