Islamabad, President Dr. Arif Alvi has taken a strong stance against banking frauds, directing the Banking Mohtasib to collaborate with the State Bank of Pakistan (SBP) for the issuance of SOPs aimed at blacklisting individuals involved in proven bank frauds.

According to Press Information Department, President Alvi has instructed that individuals involved in banking fraud should have their CNICs blacklisted and placed on a Central negative list, preventing them from accessing banking and financial services. This directive followed the President’s rejection of two separate appeals by United Bank Ltd (UBL) and Bank Alfalah Ltd (BAL), ordering these banks to compensate their customers who were victims of online banking fraud. The amounts to be refunded are Rs 1.9 million and Rs 0.744 million, respectively.

The cases involved Mr. Qaiser Mehmood, a UBL account holder, who lost Rs 2 million after being tricked into activating his digital banking app by a caller posing as a bank representative. Similarly, Brigadier (r) Muhammad Arif Shaikh was defrauded of Rs 994,000 through 19 transactions after fraudsters obtained his banking credentials under false pretenses. Both individuals sought refunds from their banks but were initially denied. They then approached the Banking Ombudsman, who ruled in their favor.

During the review of the banks’ appeals, President Alvi found that the banks had failed to comply with the SBP’s directives on monitoring systems to detect fraudulent transactions. He noted that the banks did not raise alerts during multiple consecutive transactions, nor did they establish the legitimacy of the transactions as required by the Payment System and Electronic Fund Transfers Act, 2007. The President concluded that the banks were guilty of malpractice and maladministration, holding them responsible for the financial losses of the complainants.

As a result, President Alvi directed UBL and BAL to compensate Mr. Mehmood and Brigadier Shaikh with the respective amounts lost due to the fraud.