ISLAMABAD, Oct 12: Traders of the federal capital have threatened to partially boycott banking services in case the State Bank of Pakistan does not implement a stringent regulatory framework to stop the cartelisation of these organisations.

Speaking at a meeting, Vice President of the National Traders Alliance Malik Sohail Hussain said banks were behaving like a cartel and robbing depositors as well as borrowers. He said banks and other financial institutions had a crippling effect on trade, commerce, industry and national savings.

The recent financial crisis in the US, which has gripped the whole world, was a result of the greed of financial institutions. He said US and EU etc., have no option but to print money that would result in a sharp surge of inflation and depreciation of dollar.

Mr Hussain said banks should mend their ways otherwise traders would stop dealing with them and reject their credit and debit cards.

Banks are earning huge profits at the cost of depositors and borrowers. The State Bank should determine a reasonable rate of return for depositors as well as banks according to the practices in 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 depositing interest, unauthorised debts, noncompliance, processing delays, service inefficiencies, hidden charges and poor disclosure practices,” said Mr Hussain.

He said lack of consumer education on banking terms and conditions, policies, rules and regulations were also critical in securing financial rights.

Credit cards, BTF, leasing, personal loans and other products are a serious issue, as banks get hidden charges and cheat customers one way or the other,” he said, adding supplementary cards were another way to relieve customers of their hard-earned money. He said plastic card users had 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 on customers,” he said.

Most of the banks issuing credit cards are fleecing customers and majority of sale representatives who promote credit cards are involved in misguiding the customers.

The sales force offers credit 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 have been continuing for years but no authority has taken any notice.

Mr Sohail said charges on credit cards were so high that even if the default rate becomes 50 per cent banks would get good profits.

Speaking on the occasion, Malik Sagheer Ahmed, president of the Blue Area Traders Association, Asad Rashid, Shahid Alam, Amin Pirzada, Yusaf Rajput, Shakil Aziz and other business leaders said lethal financial flaws should be quarantined and Standard Operating Procedures should be revisited before it is too late.

“It is time for action as a top government official has also accepted the fact that some banks are involved in flight of capital from Pakistan,” they said.