SBP Shifts Responsibility of Mobile Banking Fraud to Banks

The Pakistan Telecommunication Authority (PTA) and the State Bank of Pakistan (SBP) have decided to make mobile banking a much more reliable form for payments. To give people another incentive to use it, SBP has mandated that any mobile banking fraud will no longer be a common man’s headache. Financial Institutions will now be held responsible for the user’s loss and will also take due steps to apprehending the criminals.

PTA said in the Regulations for Technical Implementation of Mobile Banking, 2016 statement that “AFI(s) shall be liable to their customers for any financial loss, fraudulent activities and its consequences thereof in accordance with the applicable laws.”

Financial companies will be responsible for any loss suffered by the consumer while using mobile banking

The decision was made on Monday when the PTA and the SBP signed a memorandum of understanding (MoU) for the regulatory framework.

How will this System Work in Resolving Disputes?

Third party service providers and telecom operators will log detailed transaction data so that audit trails can be processed in case any disputes arise. The data will also be available to supervising authorities like the PTA and the SBP, while maintaining user confidentiality.

The regulators have devised a mechanism to resolve expected disputes. The PTA and SBP will be the final authorities on the matter and a dispute could be raised to include these authorities in case the AFI, mobile phone operators and third party service providers don’t do the needful.

A fixed timeline has not been defined for the resolution of disputes, however, all parties are said to have 28 days to raise the dispute to the regulator.

Third-party service providers and telcos will record transaction data for dispute resolution

The PTA has added special laws to regulate the third party service providers (TPSPs). They would be licensed by the PTA and authorised by the SBP to provide technical services which include channelling, routing and switching for mobile banking transactions. The TPSPs will be interoperable among the mobile banking providers.

Stakeholders Weigh In On the Matter of Mobile Banking Fraud

The Minister for IT, Anusha Rehman, said there are 29 million broadband subscribers in Pakistan which should provide a steady platform for online banking services and mobile banking applications. She added that telcos and financial bodies can tap this potential with slight effort.

Chairman PTA, Dr Ismail Shah, said “There is a huge incentive to capitalize on the next generation mobile banking opportunities and all institutions should work together to include the unbanked population in banking services through digital platforms in the next 5 years.”

Governor of SBP, Ashraf Wathra, added that “MoU signed between PTA and State Bank will be remembered as a milestone in the history of telecom and banking sectors. He further said that branchless banking is a modern facility for the people of Pakistan, it will bring convince of use to the customers and a positive impact to the GDP growth of the country.”

He said that Pakistanis have 11 million mobile accounts and over 100 million transactions, worth over Rs 500 billion, are made each year.

Prior to the MoU signing, the SBP and the PTA had set up a joint regulatory committee to come up with draft regulations, which were discussed with the relevant stakeholders and eventually approved. The regulatory framework is said to have achieved a common objective and could allow a level playing field to everyone.

He is the Editor at ProPakistani.


  • great move

  • Hamid

    Terrible move because banks will pass the buck on to merchants. Banking transactions will become reversible and merchants will either stop accepting electronic transfers or pass the cost of fraudulent transactions on to the end consumer. Merchants will also start demanding ID documents from customers that pay via electronic means.

    • Khan

      I like you Critical Analysis but aapke khyaal mein kya alternative hona chahiye?

      • Hamid

        The west is moving towards irreversible payment methods like bitcoin. We are repeating the same mistakes they made in the past instead of learning from them. Our central bank has ruled out bitcoin entirely while all the major developed world central banks are researching it and publicly stating that it is a great technology.

    • Umz

      Sir, this is not how the business world moves.
      Moreover, it is always the receiving party that commits the fraud, not the paying party.

      • Hamid

        “Moreover, it is always the receiving party that commits the fraud, not the paying party.”

        No it isn’t. Chargeback and payment reversal fraud by consumers is rampant worldwide. For example people buy things using stolen credit cards and when the owner finds out about it he goes to complain to his bank which then reverses the transaction leaving the merchant holding the bag. This is why on the internet merchants go to extraordinary lengths to police their customers. They ask for ID copies as a bank would when doing KYC/AML checks.

        The only solution to this is to make such transactions irreversible. If you allow for reversibility it increases the cost of doing business for merchants. 1-2% of the selling price in developed world. It’ll be much higher in Pakistan.

  • Usman

    Meanwhile Easypaisa launched a mobile account which can be registered on anyone’s CNIC without their consent. Send EPCNIC to 03451113737. Write Zardari’s CNIC number and you will get an sms dear Asif Zardari your account has been registered. Not just this, for transactions you will wnter your secret pin on sms to 03451113737 which is a violation of basic customer account security.

    Propakistani do some research.

    • Salman

      Sms as channel is allowed by sbp for level 0 and 1 customers, limits for these levels are intentionally kept low keeping in view inherent risks.

      As for registration every customer who registers using sms channel will get a confirmation call back from bank, if not verified the account gets suspended.

      half truth is always dangerous.

    • Abid Pakistani

      if I am not mistaken Mobicash launched this months back on propakistani atleast, so how many accounts you have so far? Oh sorry just checked from the call Center there is no such service, how come? Copied without content I guess?

    • Umz

      Please share Zardari’s CNIC. I would like to give it a try.