There was a boom in the conumer banking market in Pakistan a few months ago. Banks brought forth a number of consumer products in order to compete with one another. There was a sharp increase in credit card users in the country which saw a sharp increase within few years. Earlier a few foreign banks were issuing credit cards in the country, but almost every bank joined the bandwagon to capture its share of the market. Banks issued credit cards almost indiscriminately.
The hot item after credit cards was Auto loan. It was only because of easy availability of car financing facility from banks that the roads of big cities were inundated with cars of latest models. People misused personal loan facility to buy luxuries and satisfy their desires.
Now the honeymoon period is over. Consumer banking has come to a grinding halt. Most of the banks have stopped giving auto loans altogether and are buy in recovering the stuck up money. Consumer is finding it difficult to make payment not only because of unplanned future, but also because of increae of inflation in the country which reduced their buying power.
In their zeal to recover money, banks have practically employed thugs to pressurize customers. They have clear instructions from their employer to create a scene at the home and office of the customer in order to apply psychological pressure. In one incident a customer committed suicide when bank staff misbehaved with his family members.
The State Bank of Pakistan is doing nothing to improve the situation. It must step in to save peole and try to get some relief in the shape of reduced mark up rate and options to payback in easy installments. The government of Pakistan must also act to protect the honour of the people.
There was a boom in the conumer banking market in Pakistan a few months ago. Banks brought forth a number of consumer products in order to compete with one another. There was a sharp increase in credit card users in the country which saw a sharp increase within few years. Earlier a few foreign banks were issuing credit cards in the country, but almost every bank joined the bandwagon to capture its share of the market. Banks issued credit cards almost indiscriminately.
The hot item after credit cards was Auto loan. It was only because of easy availability of car financing facility from banks that the roads of big cities were inundated with cars of latest models. People misused personal loan facility to buy luxuries and satisfy their desires.
Now the honeymoon period is over. Consumer banking has come to a grinding halt. Most of the banks have stopped giving auto loans altogether and are buy in recovering the stuck up money. Consumer is finding it difficult to make payment not only because of unplanned future, but also because of increae of inflation in the country which reduced their buying power.
In their zeal to recover money, banks have practically employed thugs to pressurize customers. They have clear instructions from their employer to create a scene at the home and office of the customer in order to apply psychological pressure. In one incident a customer committed suicide when bank staff misbehaved with his family members.
The State Bank of Pakistan is doing nothing to improve the situation. It must step in to save peole and try to get some relief in the shape of reduced mark up rate and options to payback in easy installments. The government of Pakistan must also act to protect the honour of the people.
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