President urges banks to help protect people
from online fraud
President Dr. Arif Alvi has instructed the United Bank Ltd (UBL)
to refund the amount defrauded, augmented by associated profits, to a fraud
victim. He also emphasized the necessity to eliminate inherent vulnerabilities
within their system to preclude online fraud and deceptive transactions.
He also directed the bank to provide comprehensive awareness to
its customers about the advantages and disadvantages of online fund transfers
before enabling digital banking services.
The President conveyed these directives while adjudicating a
petition filed by UBL in opposition to the decision made by the Banking
Mohtasib, which had mandated the restitution of Rs 79,500 to Abdul Rauf (the
complainant). The said amount was debited from his account through the
Inter-Bank Funds Transfer (IBFT) service, as per a press release from the
President's House on Friday.
He called upon banks to adhere to the pertinent rules and
regulations of the State Bank of Pakistan (SBP) concerning online fund
transfers, customer consent, and transaction verification.
Furthermore, the President advised the Banking Mohtasib Pakistan
to communicate with SBP and other banks that, in cases of contested
transactions complaints being denied, affected customers should receive a
simple letter informing them of their option to seek redress through the
Banking Mohtasib institution.
The complainant in question had received a call from a number
resembling the bank's helpline. The caller, presenting himself as a bank
representative, solicited the complainant's banking details and credentials,
which were then provided. Subsequently, an amount of Rs 79,500 was debited from
his account via IBFT, despite him never having activated Internet Banking.
Upon seeking recovery of the lost funds from the bank, the
complainant received no resolution. Feeling aggrieved, he escalated the matter
to the Banking Mohtasib, which ruled in his favor.
The bank subsequently lodged an appeal with the President
against the Mohtasib's verdict.
Prior to reaching a decision on the appeal, the President
conducted a hearing at Aiwan-e-Sadr, where both the complainant and a UBL
representative were present.
The UBL representative argued that 16 transactions of varying
small sums were executed from the complainant's bank account. He further
contended that the complainant should have safeguarded his personal credentials
and that the bank could not be held accountable for the contested transactions,
as the customer himself had disclosed his banking details to the caller.
The President clarified that the bank was conflating two
distinct steps. The first entailed obtaining the customer's consent to avail
the IBFT service, while the second involved the customer's authentication prior
to executing the banking transaction.
He highlighted that the bank had initiated this channel without
obtaining the customer's consent or apprising him of the advantages and disadvantages
of the service, despite his lack of familiarity with digital banking.
He added that had the IBFT facility not been automatically
activated, the fraudulent activity would not have been feasible.
In his ruling, the President determined that the bank had failed
to adhere to SBP's directives, which mandated obtaining the customer's consent.
This non-compliance on UBL's part was deemed as maladministration.
Consequently, he dismissed the bank's appeal and further
instructed UBL to enhance its system and furnish information to customers at
the time of opening accounts.
UBL was directed to reimburse the customer with Rs 79,500 along
with accrued profits within a span of 30 days.
Source: APP