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SBP to monitor financial frauds

KARACHI: State Bank of Pakistan (SBP) is going to initiate the monitoring and recording of financial and banking frauds committed with banks and financial institutions by their customers.

The SBP has, however, turned a blind eye to the frauds committed by bankers and no information is being sought by the central bank from the banks or financial institutions.

Sources at the Banking Supervisory Department (BSD) of the SBP said on Monday that for the first time in the history of the banking industry, SBP is going to seek the mother’s name of the borrower, besides obtaining his father’s name.

Sources said banks and financial institutions would be required to report, on a monthly basis, the details of financial frauds on specified pro forma, to be sent electronically to the Credit Information Bureau (CIB) of the SBP.

The reporting bank or financial institution would be legally bound to report:

1. The brief nature of the fraud. 2. Name of references as provided by the customer in his or her loan application. 3. Particulars of property and collateral as provided by the customer in his loan application. 4. Co-borrowers name. 5. Mother’s maiden name.

Sources said the SBP is also making it mandatory that at the time of sanctioning and disbursement of loans, banks and financial institutions must allot the borrower a code number, which would have to be kept confidential by both, the bank and the borrower. However, the code number of those borrowers committing frauds would have to be reported to the CIB.

Sources said besides this, the SBP has demanded that if any borrower tries to “attempt” a banking or financial fraud that attempt would have to be reported to the CIB.

Sources said with the privatisation of more than 90 per cent banking assets, policy-makers at the SBP are very much worried about the different types of risks associated with the banking sector. The central bank is trying to mitigate these risks, they added.

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