President upholds Banking Mohtasib’s order

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Bank directed to refund lost amount to account holder over unauthorized electronic funds transfer


Zubair Qureshi

President Dr Arif Alvi on Tuesday set aside a reply submitted by a bank against the order of the Banking Mohtasib who had directed it to refund the monetary loss of an account holder that occurred due to Electronic Funds Transfer (EFT) without his knowledge.
The president in his verdict wrote that it was the responsibility of banks to provide knowledge to its account holders about the use of technology to avoid such incidents.

“Our simple people need protection through knowledge of technology. Bank must ensure the same,” he stated in response to the representation filed by Habib Bank assailing the order of Banking Mohtasib, which had ordered it to refund the lost amount.

According to details, the complainant Ali Ghulam, a retired person who was maintaining his account with the HBL at Islamabad found through his bank statement that an amount of Rs 607,804 was missing from his account through ‘Non 3D Secure Transactions’.

He made a complaint to the bank stating that no request was made on his part for activation of the Internet Banking facility and his personal credentials were used in the disputed transactions.

On finding no relief to his grievance, the complainant approached the Banking Mohtasib which thrashed the matter on the grounds that the bank did not produce any evidence that it had apprised the account holder of the pros and cons of electronic fund transfer and other related usage of technology at the time of establishing banking relationship.

The bank was also found non-compliant to instruction of State Bank of Pakistan Circular dated 10 June, 2016 which mandates the bank that “Card Service Provider shall take Consumer’s consent regarding utilization of payment cards on various ADC’s or their cross border usage while maintaining record of consent as per SBP record /retention policy.”

The president in his order said resultantly, the loss of money to the complainant had occurred due to the reason that the bank’s facility of EFT was made operational without his request and consent.

“Had this channel not been opened by the Bank, the account holder would have avoided this financial loss,” he said.

The president held that the cumulative reading and perusal of the provisions of law undoubtedly leads to the conclusion that the Banking Mohtasib is to inquire into complaints about banking malpractices, maladministration, wrong doings, the fraudulent transactions, the corrupt and malafide practices by the Bank officials and pass appropriate orders on conclusion of inquiry.

The president mentioned that the bank was given ample opportunity to controvert the claim of the complainant and the findings of the learned Banking Mohtasib.

However, he said, “the bank failed to discharge the burden and statutory liability cast upon it under the law”.

“The representation of the bank is devoid of any merit and deserves to be rejected,” he concluded the order.

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