Banks to pay if depositors lose funds to digital frauds: SBP

The State Bank has warned banks that they would be held responsible for lost account holder funds if they failed to take preventive measures to combat social engineering and other digital banking frauds on time. “Banks are required to compensate the customers due to delay on their part in taking timely remedial and control measures such as delay in blocking digital channels, delay in raising dispute requests, etc.,” the central bank said in a statement on Thursday. The number of complaints against fraud, particularly about digital transactions, has been increasing fast, as reflected in a banking ombudsman’s report. The State Bank of Pakistan (SBP) has now directed commercial banks and microfinance banks to improve their digital fraud protection controls and processes to combat social engineering and other digital banking frauds.