The Competition Appellate Tribunal (CAT) has upheld penalties amounting to Rs205 million imposed on seven major banks and the Pakistan Banks Association (PBA), dismissing long-pending appeals and affirming findings of cartel-like conduct in the launch of the Enhanced Savings Account (ESA).
In a short order issued on Wednesday, the tribunal rejected ten appeals filed against the Competition Commission of Pakistan’s (CCP) original order of April 2008 and the subsequent Appellate Bench decision of June 2009. The CAT confirmed that the coordinated introduction of the ESA by the PBA and leading commercial banks violated Section 4 of the Competition Ordinance, 2007, which prohibits agreements that restrict or distort competition.
The tribunal held that the collective conduct of the banks and the industry body undermined market competition and worked against the interests of depositors, particularly small savers. While the detailed reasoning behind the decision will be released at a later stage, the short order effectively brings to a close one of the oldest and most consequential competition law cases in Pakistan’s financial sector.
The case dates back to the formative years of the CCP and is widely regarded as the regulator’s first major enforcement action. At the time, the Commission had found that the PBA, along with Habib Bank Limited, Allied Bank Limited, MCB Bank Limited, United Bank Limited, Saudi Pak Bank Limited, Atlas Bank Limited and National Bank Limited, acted in concert instead of competing independently when launching the Enhanced Savings Account.
According to the CCP’s findings, the banks collectively agreed on key features of the ESA, including pricing and structure, which limited consumer choice and weakened competitive dynamics in the deposit market. The coordinated rollout was deemed to have reduced incentives for innovation and deprived depositors of potentially better returns that could have emerged under genuine competition.
As part of its enforcement action, the CCP had imposed a penalty of Rs30 million on the Pakistan Banks Association and Rs25 million on each of the seven banks involved. The penalties were challenged through multiple appeals over the years, resulting in prolonged litigation and significant delays in final adjudication.
The Competition Appellate Tribunal’s decision to dismiss the appeals is being seen as a landmark development for competition enforcement in Pakistan. By upholding the penalties after more than a decade of legal proceedings, the tribunal has reinforced the authority of the CCP and validated its early interpretation of competition law in the banking sector.
The CCP described the ruling as a major milestone, noting that it reflects the regulator’s persistence in pursuing accountability despite systemic delays in the judicial process. CCP Chairman Dr Kabir Ahmed Sidhu said the decision reinforces the principle that no institution, regardless of its size or influence, can indefinitely evade responsibility for anti-competitive conduct.
He added that the verdict sends a clear message to the market that coordinated behaviour designed to restrict competition will not be tolerated. According to the CCP, the ruling strengthens the legal foundation for future enforcement actions and enhances confidence in the country’s competition regime.
Legal and industry observers say the decision has broader implications for Pakistan’s banking sector, where coordination through industry associations has historically been common. While such coordination can serve legitimate purposes, regulators have increasingly stressed that it must not cross into conduct that limits competition or harms consumers.
The ruling is also expected to encourage greater compliance with competition law among financial institutions, particularly in areas such as product pricing, service offerings and market entry. Banks may now exercise greater caution when engaging through industry platforms to ensure that collaboration does not amount to collusion.
From a regulatory perspective, the outcome strengthens oversight of the banking sector and underscores the growing maturity of Pakistan’s competition framework. It also highlights the importance of institutional continuity, as enforcement actions initiated in the early years of the CCP have now reached final resolution.
By endorsing the CCP’s findings, the Competition Appellate Tribunal has reaffirmed the role of competition law in safeguarding market fairness and protecting consumers. The decision is likely to be cited as a precedent in future cases involving coordinated conduct, marking a significant moment in the evolution of competition regulation in Pakistan.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.