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ISLAMABAD: Telecom companies (telcos) and banks faced-off on Wednesday before a Senate panel meeting that focused on complaints by bank customers regarding being overcharged through regulatory or unauthorised messaging services.
Representatives of the banks and telcos blamed each other for charging an extra fee — which collectively amounts to Rs26 billion — to bank customers during the meeting.
This led the Senate Standing Committee on Finance, led by PPP Senator Saleem Mandviwalla, to dig deep into the matter and ask both sides, as well as the State Bank of Pakistan (SBP), to provide their transaction details and rates of service charges.
The meeting also decided to seek the Pakistan Telecommunication Authority’s (PTA) assistance. Some senators were of the view that banks should not separately charge SMS fees, and that it should either be included in their service charges or rationalised.
At the outset, Pakistan Banking Association (PBA) President Zafar Masud said there were two types of SMS charges, pertaining to the mandatory regulatory requirement of the SBP and transaction-related messages, and none of them were discretionary.
Assisted by the presidents of Habib Bank, Muslim Commercial Bank and Meezan Bank, Masud said the banks were charging their customers for only transaction-related messages, with the upfront consent of customers, in the interest of their security, and to avoid fraud and unauthorised transactions in their accounts. Moreover, he said, the schedules of the charges were declared regularly by the banks.
He said the charges did not meet the cost of SMS services.
The banks paid around Rs25.6bn to the telecom companies while they got only Rs18.7bn from customers, which left them with a loss of Rs7bn, he said, adding that telcos’ rates charged to banks had gone up by 88 per cent since 2021. And 88pc customers were now using digital accounts and mobile apps that no longer required SMSs, he said.
The PBA chief said that telcos charged around 60 paisa per SMS to their own customers for similar messages but around Rs2.6 to Rs3.4 per message to banks, despite the latter being bulk and corporate clients, which was “unreasonable”.
SBP Deputy Governor Dr Inayat Hussain argued that some regulatory SMS were mandatory and should be free of cost under the SBP rules. He, however, opposed seeking details from banks about SMS-related financials, saying it would be very difficult.
Muddassir Husain from Jazz, who led the telcos’ representatives, said SMSs were one of the core parts of their business. But, he also pointed out that banks seldom send 2-3 messages to customers per day, which meant that customers were charged around Rs300 per month at the most. The banks, however, were charging more than Rs400 to their customers, he said, adding that the telcos also applied similar rates to the Benazir Income Support Programme.
Senator Anusha Rehman said the actual cost of an SMS was one or two paisa, and telcos even offered 300-500 free SMSs to their customers per month. However, charging Rs2.5-3.5 per message meant the banks or telcos or both were involved in arbitrage charging, she said, adding that this should be investigated and rationalised.
During the meeting, it was revealed that the banks and telcos did not have direct settlement arrangements but operated through third parties called aggregators who got messages from banks or telcos and then sent them to customers. The panel decided to discuss the matter again in its next meeting on the basis of details received from both sides.
It also discussed the issue of non-payment of the budget honorarium announced by the finance minister to the medical and PTV staff deputed at Parliament House during the budget session. The committee chairperson directed that the matter should be immediately referred to the finance minister for approval and payment of the honourarium. Otherwise, the committee would take stern action against non-compliance, he warned.
The matter of salary increments for university faculty members and professors under the tenure track system (TTS) was also taken up. The committee was informed that university staff had been deprived of annual salary increases for the past 10 years. The panel termed this situation a clear injustice to the staff.
Minister of State for Finance and Revenue Bilal Azhar Kayani assured the panel that the matter would be taken up with the relevant authorities and a report would be submitted within 15 days.
The meeting also took up the matter raised by the Sarhad Chamber of Commerce and Industry regarding the classification of polyurethane (PU) leather. Pakistan Customs briefed the committee that PU fell under the category of textiles rather than leather as it contained fabric backing on one side, and the importer was liable to pay taxes as per the prescribed category. The representatives of the chamber said that it was a type of leather and not fabric, and that it should be treated as such under the relevant law for import.
Federal Board of Revenue Chairman Rashid Mahmood Langrial advised the affected parties to file an appeal with FBR’s policy member for further consideration and direction, and the committee endorsed the recommendation.
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