New banking arbitration service designed to reduce customer woes

By : Leo Broomfield

   The Polish Banking Association (ZBP) said last week it intends to set up a banking arbitration service designed to streamline and centralize the way domestic banks deal with customer grievances. ZBP said the service would be up-and-running sometime in the fourth quarter of this year or the first quarter of 2002.

   “Arbitration service is designed to resolve the smaller conflicts between banks and customers,” said Norbert Jeziolowicz, adviser to the president of the ZBP. “It is modeled after EU countries’ banking ombudsmen, and all banks in Poland are associated.”

   Jeziolowicz said the idea was to speed up the resolution of small-scale conflicts in the banking sector and reduce costs, especially the legal costs required to take small cases to court.

   He said the service could be expected to cut the time taken to process clients’ banking complaints to six to eight weeks, from about 10 weeks with the existing legal mechanisms.

   “Any case involving conflicts between clients and their banks up to zł. 8,000 will be dealt with,” he said, adding that the figure was an arbitrary – but flexible – one.

   Arbitration service has no formal legal powers, and any case that is not successfully dealt with will go to the courts.

   The annual cost of setting up and running the service is estimated to be about zł. 1.5 million-2 million ($350,000-$475,000). Most of which will be covered by banks themselves, though part will be paid by fees charged to clients for using the service.

   “We have no idea how this idea will catch on in the Polish market,” Jeziolowicz said. “But we hope to push transparency and efficiency to the center of the banking system’s relations with its regular clients.”