KARACHI: The Banking Mohtasib has asked the State Bank of Pakistan (SBP) to restore the verification through biometric system for activation/re-activation of online banking services.
The non-availability of biometric verification system is creating unsafe environment for banking customers, according to annual report for the year 2020 issued by the office of Banking Mohtasib Pakistan on Thursday.
The Mohtasib said that the SBP vide its PSD Circular No. 9 of 2018, (dated November 28, 2018), made it mandatory for banks to have biometric verification at any branch of their banks for activation/ re-activation of online banking services, including internet/mobile banking for their customers.
The above instructions were suspended vide PSD Circular No. 2 of 2020 (dated March 18, 2020) which inter-alia was one of the measures to control the spread of pandemic of COVID-19.
However, it has been observed from complaints received in Banking Mohtasib Pakistan office that the fraudsters are taking advantage of suspension of bio-metric verification conditionality as since suspension the number of complaints relating to IBFT/internet banking transactions are increasing day by day.
“The SBP is, therefore, recommended to lift the suspension, if considered appropriate, or some alternate for bio-metric be introduced to reduce/avoid miseries of innocent account holders.”
In other recommendations to SBP, the Banking Mohtasib office pointed out systemic deficiencies and control weaknesses within banks.
Such weaknesses are brought to the attention of banks’ senior management. For issues of a serious nature, a report is submitted to the State Bank of Pakistan for action as it may consider appropriate.
Some of the issues which have been brought to the notice of State Bank of Pakistan for appropriate regulatory intervention are as under:
• It has been observed that instructions issued by SBP from time to time vide their different circulars are not followed by banks in letter and spirit. One of the reasons may be the inflow of variety of circulars and change in instructions or various modifications on the same subject which cannot be grasped / adopted by banks due to frequent changes in the instructions and influx of certain information from time to time.
It is, therefore, recommended that a Master Circular on each subject may be issued so that all the Instructions / modifications may be centralized and incorporated in a Master Circular in order to facilitate banks as well as all the stake holders.
• A comprehensive consumer complaints data is available, but at present it is dispersed among individual banks, SBP and Banking Mohtasib office. SBP and Banking Mohtasib Pakistan office have published some statistics in this regard, but there is a need for a consolidated data base of all consumer complaints which would facilitate the regulator as well as banks to better identify and address recurring problems and areas of weak controls. It is recommended that a data on all consumer complaints be made for effective analysis.
• Section 82 B (4) (b) of Part IV A of the Banking Companies Ordinance, 1962, confers the power and responsibility to the Banking Mohtasib to facilitate an amicable resolution of complaints after hearings. However, this is rendered impossible for the reason that the managers or officers of banks appearing at the hearing have no such authority from their institutions to negotiate and arrive at an amicable settlement and they tend to refer the simple issues to their Head Offices which not only delays the process of speedy justice, but also leads to a series of further communications.
Further, Banking Mohtasib Pakistan has noticed many instances where banks agree to make payment to complainants, but the process of their internal approval is largely found to be time consuming which defeats the very basic purpose of providing speedy justice.
The banks are thus required to make their complaint resolution mechanism compatible to relevant law to ensure prompt payment to the customer in case of complaints attaining finality under law or resolved by process of amicable settlement.
• Reducing of notice period of complaint from customers from 45 to 15 days as it appears to be a long period which deprives the Complainant from early resolution of their complaint.
• As per Section 82 D (1) of Banking Companies Ordinance, 1962, the Complainant is required to file his Complaint on Oath. However, It is suggested that amendment may be made in the relevant section and Complainant may be allowed to submit an undertaking instead of an attestation by the Oath Commissioner.
