President for blacklisting proven bank fraudsters, directs banks to refund Rs 2.74 million to fraud victims

President Arif Alvi


ISLAMABAD, 21: President Arif Alvi has asked the Banking Mohtasib to take up the matter of banking frauds with the State Bank of Pakistan (SBP) to get essential SOPs issued so that proven fraudulent personnel’s CNICs could be blacklisted, placed at Central negative list, and no Banking/financial facility could be extended to them by the Banking industry.

The President issued these directions while rejecting two separate representations filed by the United Bank Ltd (UBL) and Bank Alfalah Ltd (BAL) directing the banks to pay Rs 1.9 million and Rs 0.744 million respectively to their customers who fell victim to online banking fraud at the hands of fraudsters.

As per details, Mr Qaiser Mehmood who was holding an account with UBL received a call from a number resembling the Bank’s helpline and the caller advised him to activate his disabled digital banking app. He activated his app, after which Rs 2 million were transferred from his account through multiple transactions. Similarly, Brigadier (r) Muhammad Arif Shaikh received a call from fraudsters asking him for his banking credentials to remove some technical flaws from his account. Later, an amount of Rs 994,000 were transferred from his account through 19 transactions. They asked their respective banks to refund their money, but to no avail.  Feeling aggrieved, they separately approached the Banking Ombudsman to get relief. The Ombudsman directed the banks to refund the lost amounts to the customers. The banks, then, separately filed representations against the Ombudsman’s decisions with the President.

The President held personal hearing of the cases, and having listened to the parties and going through the available record, decided the cases in the complainants’ favour.

The President observed that the banks were found non-compliant with the SBP’s directives regarding the implementation of monitoring systems to detect fraudulent transactions. He added that multiple consecutive transactions were conducted but it did not raise alerts and allowed the money to pass through the system. He noted that the banks also failed to establish the legitimacy of transactions in terms of Section 41 of the Payment System and Electronic Fund Transfers Act, 2007. He said that the banks failed to submit any proof of compliance with the directions of SBP despite being given ample opportunity. He concluded that malpractice and maladministration stood established on part of the banks and they were liable to make good the financial loss of the complainants.

The President, therefore, rejected the representations of UBL and BAL and directed them to pay Rs 1,998,500 and Rs 744,000 to Mr Qaiser Mehmood and Brig (r) Muhammad Arif Shaikh respectively.