FOREIGN banks in Pakistan are appa-rently no more interested in opening new accounts, as they have made the process extremely difficult. The process actually discourages people from keeping deposits with banks. At the same time, they are unilaterally and without intimation closing old active current accounts, citing a vague reason that the account “does not meet the requirement” of the banks.

There is probably only one foreign bank active in Pakistan. They are in the process of shedding all interest-bearing deposits. Taking shelter behind the government plan to implement Islamic banking by January 1, 2028, they have started a campaign whereby the customers are being advised to opt for conversion or alternatively invest a major portion of the saving deposits in government papers, thus shifting their liability to government books. The third option being offered is the closure of account.

Why are they in such a rush when the deadline to eliminate interest-based banking practices is still three years away? It seems that the banks are awash with surplus funds and want to close the accounts.

In the absence of effective regulations and consumer protection societies, private commercial banks, with no checks and supervision, are enjoying the liberty of dictating their own terms and conditions to their customers.

It is high time the regulators intervened and came out with a clarification to two critical points: can an account be closed just because a person does not want to switch over to Islamic banking before the deadline, and under what other circumstances a bank can use its discretion to close a customer account without his/her consent and intimation?

Khaled
Islamabad

Published in Dawn, December 29th, 2024