When Askari Bank blocked accounts of customers who had not completed their biometric verification in time, people flooded to its branches in panic. The bank’s crackdown was a good way to force people to comply with anti-money laundering regulations—but under the lockdown, it was a risky business.
At least 90 accounts were blocked in a single branch, according to an insider who requested that we don’t identify him. To be fair, the bank had been pushing people for a year and with repeated reminders to get their biometrics done. But by the time March rolled around and the lockdown had intensified there was good reason to suspend it to avoid long lines. The older the branch, the larger the customer base, the higher the number of suspended accounts, said the insider.
The risk was so great of spreading coronavirus that the bank had to reverse its decision and extend the deadline two months, he added. “Keeping in view the Covid-19 crises, accounts have been temporarily reactivated,” Askari Bank wrote in response to our queries. It did not explain, however, why the decision was taken in the first place.
This may not be the only case in which bank employees and customers have been put at risk since the lockdown was put in place more than a month earlier. Branch-level operations remain a concern for both staff and customers.
Muslim Commercial Bank and Bank Al Habib Limited customers complained, for example, that branches asked them to collect their cards in person. “We refer to your appended email and advise that as per [the] bank’s policy, ATM card[s] may only be collected by personally visiting the relationship branch and producing the original CNIC,” Bank Al Habib’s Customer Services Division said. This is standard practice at some banks, but customers said it was risky and questioned why a courier could not be used? MCB’s response was awaited when this report went online.
As with other essential services, banks were exempted from lockdown restrictions as long as they implemented social distancing. The central banked advised reduced operations from 10am to 4pm till April 28. “The SBP has instructed banks to facilitate customers as much as possible, especially under the prevailing situation,” the SBP’s chief spokesperson Abid Qamar said. The priority was to avoid crowding. “How they do it, is up to the banks.”
For its part, the central bank took measures to minimize physical banking. It made interbank electronic transfers free, allowed instant clearance of cheques (that would take two days, weeks in some cases) and asked banks to ensure ATMs worked 24 hours. It asked banks to wash currency notes collected from hospitals. Banks can credit customer accounts for the amount and issue fresh notes or old ones after putting them in quarantine for 15 days.
The SBP said banks can close branches if a staffer is infected or it doesn’t have enough resources to implement social distancing.
Despite this, long lines were still forming in Karachi at least. “Since branches deal with customers, they are mostly crowded,” said one bank’s employee. “Therefore, there is no work at the branch level that can be done from home.”
Despite the growing use of internet banking and mobile banking apps, there are only 3.3 million internet banking users (as of June 2019) in Pakistan, a country of 207 million with 60% of the population over the age of 15 years.
Pakistanis prefer cash to electronic transactions. Even in e-commerce, 90% of payments are cash-on-delivery transactions. Critics say that the banking sector is largely paper-based which is why people need to go in for signatures, validation and biometrics.
“There may be unavoidable reasons to call people to the bank,” said another banker who works in National Bank of Pakistan and could not be named as he was not authorised to speak to media. “For example, we are calling people who receive pensions so they can collect their cards and use digital banking.” People also need to be called in if discrepancies surface on source of income or the courier is not reliable.
Of course, banks are trying to promote digital banking and many have given their staff targets. “In the first phase, the entire staff was asked to activate online banking accounts and in the second phase, we have been given a target for new mobile wallet accounts,” said one banker. “These targets have been linked to our performance. We have been educating customers on how to use mobile banking apps. This is the model the banking industry will be working on even after the coronavirus crisis subsides.”