Banks may not responsible for customers’ security lapse

Banks may not responsible for customers’ security lapse

KARACHI: Depositors will require submitting a declaration to their financial service providers for taking responsibility for any security lapse and subsequent monetary losses related to their accounts.

New account holders will give this declaration to banks from April 01, 2021. Under this declaration customers will be responsible for sharing their personal information which resulted in fraudulent activity and monetary losses.

The State Bank of Pakistan (SBP) on December 14, 2020 issued regulations for further strengthening depositors’ protection. The regulations namely ‘Key Fact Statement for Deposit Products’ are aimed at increasing consumer comprehension about a banking product’s affordability and risks, leading to better decision-making.

However, the regulations provide a sigh of relief to banking institutions as an annexure related to this clearly explain: “Safe custody of access tools to your [prospective account holder] account like ATM cards, PINs, Cheques, e-banking usernames, passwords; other personal information, etc. is your responsibility. Bank cannot be held responsible in case of a security lapse at the customer’s end.”

At present a large number of people having bank accounts are receiving calls from fraudsters pretending themselves as bankers or officials from the SBP. Such fraudsters ask people to update their account details and demand secret information related to their accounts including identity, password, pin code etc. They further pressurize people that in case requirements are not provided then their bank account will be suspended. Having such serious calls many people compromise their information and lose a handsome amount within a short span of time.

The central bank and commercial banks for a long time are running an awareness campaign that financial institutions never ask account holders to share any information on phone calls.

“SBP never asks for any personal details regarding legal status, CNIC or any bank account details,” the central bank clearly mentioned on its website. Furthermore, banks have also displayed such messages on their official websites and aware people through the media.

Despite these clear instructions of the SBP and commercial banks, people are sharing their information to such fake calls and losing money on a regular basis. On the other hand, banks were held responsible for the losses when customers made appeals before Banking Mohtasib.

A customer declaration under ‘Key Fact Statement for Deposit Products’ will help banks to make strong defence in cases of security lapse and money losses.