ISLAMABAD: Pakistan’s President Dr. Arif Alvi has taken strict action to provide justice to victims of online banking fraud, directing Banking Mohtasib to facilitate the refund of Rs2.74 million to people who fell prey to scams.
The president urged Banking Mohtasib to coordinate with the State Bank of Pakistan (SBP) to establish essential standard operating procedures (SOPs). These SOPs would allow the blacklisting of proven fraudulent persons’ Computerized National Identity Cards (CNICs) and their inclusion in the central negative list, ensuring that the banking industry denies any facilities to them.
The president’s directives came after rejecting two separate representations from private banks, ordering them to pay Rs1.9 million and Rs0.744 million, respectively, to customers who suffered losses due to online banking fraud orchestrated by fraudsters.
One victim, Qaiser Mehmood, received a call resembling the bank’s helpline, instructing him to activate his disabled digital banking app. After activation, Rs2 million were transferred from his account through multiple transactions.
Another victim, Brigadier (retd) Muhammad Arif Shaikh, received a call from fraudsters asking for his banking credentials, resulting in Rs994,000 being transferred from his account through 19 transactions. Despite their requests, the banks refused to refund the money, leading the victims to approach the Banking Ombudsman for relief.
Banks Ordered to Refund Lost Amounts to Customers
Upon the Ombudsman’s directive, the banks were instructed to refund the lost amounts to the customers. However, the banks filed representations against these decisions with the President. After holding personal hearings and reviewing the cases, President Alvi found the banks non-compliant with SBP directives related to the implementation of monitoring systems to detect fraudulent transactions.
The banks failed to establish the legitimacy of transactions, as required by the Payment System and Electronic Fund Transfers Act, 2007.
Concluding that malpractice and maladministration were evident, President Alvi rejected the banks’ representations and ordered them to pay Rs1,998,500 and Rs744,000 to the complainants. The president emphasized the need for banks to adhere to SBP directives and take measures to prevent and address online fraud effectively.
