KARACHI: Asian banks, including Pakistani peers, must balance inclusion goals with financial literacy and consumer empowerment initiatives, ensuring that clients are informed about their sustainability strategies and financing practices, stressed the latest scorecard by Fair Finance Asia (FFA).

FFA on Thursday published a new scorecard, Empowering Consumers as Drivers of Sustainability in Asia`s Financial Sector, which benchmarks the policies of 15 banks across Pakistan, Cambodia, Indonesia, the Philippines, and Thailand in four key areas: financial inclusion, consumerprotection,financial literacy and education, and engagement and accountability mechanisms.

In Pakistan, United Bank Ltd (UBL), MCB Bank and the National Bank of Pakistan (NBP) scored better, on average in financial inclusion (6.7 out of 10), and consumer protection (6.9/10) but scored poorly on financial literacy (3.3/10) and engagement mechanisms (1.2/10).

`Despite UBL, MCB Bank, and NBP offering products targeting unbanked or underbanked populations, the scorecard results show that they fail to publicly disclose measurable targets for financial inclusion, said the scorecard.

None of the assessed banks disclose information to prevent over-indebtedness, and neither have mechanisms for consumers to file complaints about financed projects` environmental, social, and governance (ESG) impacts.

`In addition, UBL, MCB Bank, and NBP do not disclose information regarding the companies or projects they finance,` said the report.

The assessed Pakistani banks could also not explain how their sales staff and/or authorised agents communicate proactively with (actual or potential) consumers about sustainable finance investment products, further highlighting a disconnect between banks and their stakeholders.

`Banks in Pakistan appear to prioritise profit over purpose, often promoting financial products with limited knowledge of their impacts on individuals and society. Banks must do more to empower people and protect the planet, said Fair Finance Pakistan Country Programme Lead Asim Jaffry.

`Asian consumers are increasingly expecting transparency and accountabilityfromfinancialinstitutions,` said FFA Programme Lead Bernadette Victorio.