The top competition watchdog in Pakistan has moved against the country’s apex association of banks over suspicions that its was providing a platform for its members to collude on fixing ATM cash withdrawal fees.

On Feb. 14, the Competition Commission of Pakistan conducted a search and inspection of Pakistan Banks’ Association head office in Karachi along with law enforcement agencies over its suspected role in providing a platform for the collusion.

The watchdog organization that day also conducted inspections and searches at the offices of 1-Link, the country’s largest shared financial-services network, a commission spokesperson tells PaymentsSource.

The two bodies are under suspicion of engaging in collusive activities prohibited under Section 4 of the Competition Act, he says, adding that the bank association’s board includes founding members of 1-Link.

A spokesperson for the Pakistan’s Bank Association told PaymentsSource that there was an inspection and that the association cooperated with the watchdog’s inspectors during the search. He would not talk further on the matter.

1-Link is a consortium of 31 banks that is owned and operated by 11 founding banks, according to the spokesperson, alleging that most of the member banks were colluding to charge uniform ATM-withdrawal fees.

“In all, 26 banks were charging a uniform amount of 15 rupees for ATM cash-withdrawal transactions,” he alleges, noting that with no guideline from the State Bank of Pakistan, their similar fees raised a suspicion of collusion.

In Pakistan, two networks switch ATM cash withdrawals, 1-Link and Mnet, which has approximately 15 members, none of whom have been charging the 15-rupee fee, the spokesperson confirms.

“All the banks charging 15 rupees are members of 1-Link,” he says. “We have found evidence in the searches that the banks’ association has a role in terms of pricing policy amongst banks in respect of ATM cash-withdrawal fees.”

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