President Dr Arif Alvi has directed two private 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.
Additionally, President Alvi has urged the Banking Mohtasib to address the issue of banking fraud with the State Bank of Pakistan (SBP) to establish necessary Standard Operating Procedures (SOPs).
These SOPs would facilitate the blacklisting of proven fraudulent individuals’ Computerized National Identity Cards (CNICs), placing them on the Central negative list, thereby restricting any banking or financial facilities extended to them by the banking industry.
The President issued these directives after dismissing two separate appeals filed by the private banks. One citizen, Qaiser Mehmood, was deceived into activating his disabled digital banking app after receiving a call from a number resembling the bank’s helpline.
Subsequently, Rs 2 million were fraudulently transferred from his account through multiple transactions. Similarly, Brigadier (r) Muhammad Arif Shaikh received a call from fraudsters soliciting his banking credentials to rectify purported technical flaws, resulting in Rs 994,000 being transferred from his account through 19 transactions.
Despite the victims’ efforts to seek reimbursement from their respective banks, they were unsuccessful. Feeling aggrieved, they individually approached the Banking Ombudsman for relief. The Ombudsman directed the banks to refund the lost amounts to the customers.
In response, the banks filed separate representations against the Ombudsman’s decisions with the President. After personally hearing the cases, President Alvi decided in favor of the complainants, citing the banks’ non-compliance with SBP directives on implementing monitoring systems to detect fraudulent transactions.
He noted that the banks failed to raise alerts for multiple consecutive transactions and did not establish the legitimacy of transactions under Section 41 of the Payment System and Electronic Fund Transfers Act, 2007.
This move follows a similar directive in October 2023 when President Alvi instructed the Central Directorate of National Savings (CDNS) to reimburse Rs 1.2 million with profit to a woman victim of financial fraud involving a fictitious chequebook and forged signatures on the withdrawal slip.
President Alvi also urged CDNS to refer the matter to the Federal Investigation Agency (FIA) for a thorough investigation to hold accountable any CDNS officials involved in the scam.
