CCP Imposes Rs. 770 Million Penalty on Banks for Charging ATM Withdrawals

CCPThe Competition Commission of Pakistan (CCP) has imposed a total penalty in the sum of Rs. 770 million, including Rs. 50 million on 1-Link (Guarantee) Limited and Rs. 50 Million each on its 11 founding member banks and Rs. 10 Million on each of its 17 non-founding member banks for imposing uniform customer charges for ATM cash withdrawal transactions in violation of Section 4 of the Competition Act, 2010.

A CCP Bench comprising of Chairperson, Ms. Rahat Kaunain Hassan, Member, Mr. Abdul Ghaffar and Member, Dr. Joseph Wilson, passed an Order on June 28, 2012 in respect of the proceedings initiated against 1-Link and its member banks for imposing uniform customer charges for cash withdrawal transactions from ATM machines, which amounts to violate Section 4 of the Competition Act.

CCP on its own took notice of the uniform rates implemented by the banks in Pakistan for ATM cash withdrawal transactions. In preliminary fact finding it was observed that 1-Link holds 80% of market share in shared ATM network services in Pakistan and is a consortium of 11 major banks that are also represented on its Board of Directors while the other 20 banks are its members.

To further assess the matter CCP approached the State Bank of Pakistan (SBP) to enquire whether it has fixed the ATM charges. SBP in response stated the banks are free to determine these charges.

Moreover, in response to letters sent to various banks seeking rationale for uniform rates, two member banks of 1-Link confirmed that they have to comply with the schedule of charges devised by the 1-Link.

Given facts and circumstances raised a suspicion that 1-Link and its member banks may be engaged in any suspected collaborative activity to fix the rates of ATM transactions.

After inquiry, CCP concluded that such practice by banks calls for imposition of penalty on each party.

1-Link and member banks were further directed to cease and desist from conduct of collective decision making or behavior with respect to charging a uniform fee from customers for ATM cash withdrawal transactions and to hold their Board meetings for deliberation and independent decision making with respect to such imposition of fee/charge from their customers.

You can download the copy of CCP order by clicking this link (PDF File – 767 KB)

Via Economy Age

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  • Good Job CCP and now i would like to see some action on “online charges” which banks charge.

  • I need all my previously deducted charges back :P

    Any way, a good step from CCP.

  • Dear CCP and all others, all penalties imposed goes to ?????. i mean we suffer and you impose penalties but who gets the $$$. We will encourage if these charges are reverted to ralevent accounts.

    • Interesting question for me to put in front of head of CCP but I must admit that, unfortunately, CCP is the second most transparent authority in Pakistan and its getting more and more difficult for them to get their budgets from Govt.

      Nonetheless – they are working to save Pakistani consumers. This action is something we should be expecting from ‘Banking Muthassib’ but, well, we’re not living in Europe

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