President directs banks to refund Rs2.74m to fraud victims

ISLAMABAD: President Dr Arif Alvi has asked the Banking Mohtasib to take up the matter of banking frauds with the State Bank of Pakistan (SBP) to get es sential SOPs issued so that proven fraudulent person nel’s CNICs could be black listed, placed at central neg ative list, and no banking/financial facility could be extended to them by the industry. 

The President issued these directions while re jecting two separate repre sentations filed by the United Bank Ltd (UBL) and Bank Alfalah Ltd (BAL) di recting the banks to pay Rs1.9 million and Rs 0.744 million respectively to their customers who fell victim to online banking fraud at the hands of fraudsters. Qaiser Mehmood, who held an account with UBL received a call from a num ber resembling the bank’s helpline and the caller ad vised him to activate his dis abled digital banking app. He activated his app, after which Rs2million were transferred from his ac count through multiple transactions. Similarly, Brigadier (r) Muhammad Arif Shaikh re ceived a call from fraudsters asking him for his banking credentials to remove some technical flaws from his ac count. Later, an amount of Rs994,000 were transferred from his account through 19 transactions. They asked their respective banks to re fund their money, but to no avail. They separately ap proached the Banking Om budsman to get relief. The Ombudsman directed the banks to refund the amounts. The banks sepa rately filed representations against the Ombudsman’s decisions with the Presi dent. 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 mon itoring systems to detect fraudulent transactions. He added that multiple consec utive transactions were con ducted but it did not raise alerts and allowed the money to pass through the system. He noted that the banks also failed to estab lish the legitimacy of trans actions in terms of Section 41 of the Payment System and Electronic Fund Trans fers Act, 2007.