Tribunal Upholds Rs205mn Penalties in ESA Cartel Case

The Competition Appellate Tribunal (CAT) has dismissed ten long-pending appeals filed by the Pakistan Banks Association (PBA) and several major commercial banks, thereby upholding in full the Competition Commission of Pakistan’s (CCP) imposition of penalties totalling PKR 205 million in the Enhanced Savings Account (ESA) cartel case.

The Tribunal rejected the appeals against the CCP’s original order dated April 2008 and the subsequent decision of the CCP’s Appellate Bench dated June 10, 2009. Both orders had found the PBA and seven leading banks guilty of collusive practices that distorted competition in the banking sector and adversely affected small depositors.

The CCP had determined that the coordinated and simultaneous introduction of the Enhanced Savings Account product by the banks constituted a concerted practice in violation of Section 4 of the Competition Ordinance, 2007 (now the Competition Act, 2010), which prohibits agreements, concerted practices, or decisions that have the object or effect of preventing, restricting, or distorting competition.

The original penalties included a fine of PKR 30 million on the Pakistan Banks Association, with each of the following banks fined PKR 25 million: Habib Bank Limited, Allied Bank Limited, MCB Bank Limited, United Bank Limited, Saudi Pak Bank Limited (now Silkbank), Atlas Bank Limited (now part of Allied Bank), and National Bank of Pakistan.

Following extensive hearings and submissions by all parties, the Tribunal issued a short order dismissing all appeals and affirming the CCP’s findings and penalties in their entirety. A detailed reasoned judgment is expected to be released subsequently.

The ESA case represents the CCP’s inaugural major enforcement action after its establishment and has been one of the longest-running competition matters in Pakistan. The Tribunal’s decision constitutes a significant milestone, reinforcing the robustness and sustainability of the Commission’s enforcement actions despite prolonged litigation.

It also underscores the CCP’s enhanced litigation strategy and institutional reforms, which have resulted in the successful resolution of over 70% of its historically pending court cases.

Commenting on the verdict, CCP Chairperson Dr. Kabir Ahmed Sidhu remarked that the outcome reaffirms the enduring principle that justice, though sometimes delayed, cannot ultimately be denied, and that no entity can perpetually evade accountability for anti-competitive conduct.