President orders bank to refund Rs344,600 to fraud victim

ISLAMABAD  -  President Dr Arif Alvi has upheld Banking Mohtasib’s ruling, direct­ing Allied Bank Ltd (ABL) to re­imburse Rs 344,600 to a custom­er. The amount was fraudulently transferred from the customer’s account, with the bank’s activa­tion of the fund transfer facility without the customer’s consent, resulting in financial loss.

In response to ABL’s appeal against the Banking Mohtasib’s decision, the president empha­sized the bank’s failure to fulfill its legal responsibilities. The activa­tion of the Internet Banking/Elec­tronic Funds Transfer (IB/EFT) channel without customer con­sent was cited as a fundamental ir­regularity and non-compliance.

While acknowledging that the complainant received a phone call resembling the bank’s helpline, leading to a Rs 344,602 transfer from the account, President Alvi noted that had ABL not initiated the IB/EFT facility, the customer could have avoided this financial loss, having never requested nor utilized such channels previously.

Mr Ameer Ali Wasan, a citizen of Hyderabad, promptly reported the fraud to the bank, but his griev­ance remained unresolved. Subse­quently, he sought recourse from the Banking Mohtasib for the lost amount, resulting in the directive for ABL to refund the defrauded sum. ABL contested this decision with the President.

After personally reviewing the case, the president highlighted ABL’s failure to validate the le­gitimacy of the disputed transac­tion in line with Section 41 of the Payment System and Electron­ic Funds Transfer Act, 2007. The transactions, conducted within a short span and similar in pattern, should have triggered the bank’s alert system to notify the custom­er. The President expressed con­cern over this lapse and urged both banks and the State Bank of Pakistan to address such issues.

The President concluded that the IB/EFT facility was unsolicit­ed, emphasizing ABL’s non-com­pliance with crucial provisions of the Payment Systems and EFT Act 2007 and State Bank directives concerning the activation of such channels. Consequently, the Pres­ident dismissed ABL’s appeal and directed compliance within 30 days from the order date.

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