SBP instructs banks/DFIs on insurance premium

 The State Bank of Pakistan has directed all banks and Development Finance Institutions (DFIs) that they should not retain a part of insurance premium received from customers for payment to insurer. They (banks & DFIs) may also not charge customers any amount in excess of their actual cost under various heads being paid to the service providers.According to a Circular (BPRD Circular Letter No. 5) issued today by the State Bank, Banks/DFIs should clearly disclose all charges recoverable from the customers at the time of entering into agreement with them and the same shall also be duly incorporated in their schedule of charges. “All banks/DFIs are advised to ensure strict compliance of the above instructions in letter and spirit as non-compliance will attract punitive action under BCO, 1962,” the Circular added.