Aiming to improve transparency and safeguard consumers in the sale of third-party products, the State Bank of Pakistan (SBP) issued a comprehensively revised set of instructions on Wednesday. In addition to the typical banking products or services, banks often offer or sell other financial products provided by other financial institutions, generally referred to as bank assurance or third-party products, says a circular issued by the external relations department of SBP. “Such offers are often prone to misdeclaration about the quality or pricing of products. Further, banks also don’t assume any responsibility after the sale of products, which leads to difficulties for customers and disputes,” the central bank said. In addition, the revised instructions issued by the SBP will also facilitate the sale of products through digital channels and promote financial inclusion. According to the circular issued by the central bank, it will be mandatory for banks to assess the suitability of customers for the sale of third-party products. In addition, they will take extra care while selling such products to vulnerable consumer segments like widows, senior citizens, etc. Islamic banks and the Islamic branches of conventional banks will strictly ensure that the sale of third-party products is in compliance with shariah law and SBP regulations while their agreements with third parties should also be approved by their shariah board. SBP statement says that the SBP has directed the banks to use their audit and compliance functions to ensure compliance with SBP’s regulations in their business practices related to the sale of third-party products. The instructions issued by SBP say that senior management and the board of directors will ensure that risks to consumers in the sale of third-party products are identified and addressed in a proficient manner. Banks also have been directed to mention explicitly that the product is being sold as an agent or distributor of a third party. To further increase the accountability of bank employees involved in selling third-party products, SBP advised to develop and enforce a code of conduct.