The Competition Commission of Pakistan (CCP) has imposed a total penalty of the sum 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 non-founding members 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 aGhaffar and Member, Dr. Joseph Wilson, passes an Order on June 28, 2012 in respect of the processing initiated against 1-Link and its members bank 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 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 access 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.
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.
After inquiry, CCP concluded that such practice by banks calls for imposition of penalty on each party.
