A CRITICAL REVIEW OF CONSUMER PROTECTION LAWS AND ITS RELATIONSHIP WITH BANKING PRACTICES IN PAKISTAN

Abstract

The financial landscape of Pakistan has undergone significant transformation over the last decade, marked by rapid digitalization and an influx of diverse banking products. Consequently, the intersection of consumer protection laws and banking practices has emerged as a critical area of legal and economic scrutiny. This research article presents a critical review of consumer protection laws in Pakistan, specifically evaluating their evolution, implementation, and impact on the banking sector over the last ten years. Utilizing a qualitative doctrinal research methodology, the study investigates the trends that have either benefitted or discouraged consumers. It analyzes the complex implementation of these laws within the banking industry, particularly in light of the devolution of consumer protection to provincial jurisdictions following the 18th Constitutional Amendment, contrasted with the federal regulatory umbrella of the State Bank of Pakistan. The findings reveal a stark jurisdictional ambiguity, a prevalent culture of procedural compliance by banks rather than substantive consumer relief, and a significant disconnect between provincial consumer courts and federal banking regulators. The article concludes that while recent regulatory interventions by the State Bank have modernized the grievance redressed mechanism, the overarching legal framework remains fragmented, necessitating a harmonized and specialized financial consumer protection regime to align banking practices with the substantive rights of consumers.