President directs refund of Rs 4.1m to bank fraud victims

• Banks activated EFT without consent of customers.
• The complainants not requested banks to open EFT.
• President, therefore, rejected the representations of banks.

ISLAMABAD: President Dr Arif Alvi has directed two private banks to return a collective sum of Rs 4.1 million to four customers, who were swindled out of their money by fraudsters.

The banks had activated the Electronic Funds Transfer (EFT) without obtaining the consent of the customers and were found negligent in complying with the State Bank of Pakistan’s various regulations regarding online fund transfer facilities, disclosing the terms of fund transfer in a clear and simple language to customers, and assigning limits to fund transfer.

President said that the loss of money occurred due to the reason that the banks made EFT operational without the account holders’ request, therefore, the banks committed maladministration and were liable to make good the loss of the customers.

President gave these remarks while rejecting three representations filed by Muslim Commercial Bank (MCB) and one by Allied Bank Ltd (ABL) against the orders of the Banking Mohtasib directing these banks to refund the lost amount to victims of bank fraud.

As per details, Ms Sumera Allahditta, Afzal Abbas Kazmi, Ms Farah Muhammad Khan, and Dr Kanwar Shakeel Ahmed (the complainants) lost Rs 1,558,700, Rs 985,000, Rs 960,000, and Rs 598,000 respectively when these amounts were transferred from their bank accounts without their consent.

President observed that the complainants had not requested their respective banks to open EFT facilities and the banks also did not put in place adequate systems and controls to mitigate the risk of fraudulent activities.

He further stated that the banks were found negligent and in non-compliance with SBP’s rules and regulations on obtaining the consent of customers before opening online fund transfer facilities, informing the customers about the pros and cons of EFT facility in writing in simple language, and transaction limits.

President concluded that the banks were given ample opportunity to controvert the claims of the customers and present evidence that customer consent was obtained.

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President, therefore, rejected the representations of banks and directed them to pay the collective sum of over Rs 4.1 million to the aggrieved customers.