President Alvi for action against banking frauds
Business
President Alvi for action against banking frauds
ISLAMABAD (APP) – President Dr Arif Alvi has urged the Banking Mohtasib to address the issue of banking frauds with the State Bank of Pakistan (SBP), seeking the issuance of essential standard operating procedures (SOPs).
These SOPs aim to blacklist the CNICs of proven fraudulent individuals, placing them on the central negative list.
The president emphasised ensuring that the banking industry refrained from extending any financial facilities to these individuals.
These directives were issued in response to the rejection of two separate representations filed by the United Bank Ltd (UBL) and the Bank Alfalah Ltd (BAL).
The president dismissed the banks' appeals, instructing them to compensate their customers who had fallen victim to online banking fraud perpetrated by fraudsters.
In one case, Qaiser Mehmood, a UBL account holder, received a call resembling the bank's helpline, advising him to activate his disabled digital banking app. Subsequently, Rs2 million was transferred from his account through multiple transactions.
Similarly, Brigadier (r) Muhammad Arif Shaikh received a call from fraudsters who extracted his banking credentials, resulting in Rs994,000 being transferred from his account through 19 transactions.
Despite both victims approaching their respective banks for a refund, they were unsuccessful. They then sought relief from the Banking Ombudsman, who directed the banks to reimburse the lost amounts. The banks, dissatisfied with the Ombudsman's decisions, filed representations with the president.
After personally hearing the cases and reviewing the records, President Alvi ruled in favour of the complainants, noting that the banks were non-compliant with SBP directives regarding monitoring systems to detect fraudulent transactions.
Multiple consecutive transactions were conducted without raising alerts, and the banks failed to establish the legitimacy of transactions as required by the Payment System and Electronic Fund Transfers Act, 2007.
President Alvi concluded that malpractice and maladministration were evident on the part of the banks, holding them responsible for the financial loss incurred by the complainants.
Consequently, he rejected the representations of UBL and BAL, directing them to compensate the affected customers.
