Daily Times

Karachi: State bank of Pakistan on Wednesday issued Electronic Fund Transfer (EFT) regulations to promote EFTs in the country, ensure consumer protection and payment transparency by standardizing EFT and setting uniform regulations, policy and procedures, applicable to Authorized Financial Institutions AFIs, Payment System Operators /Payment Service Providers operating in the country.

The regulations which would be applicable from October 01, 2018 set forth the minimum information of originator and beneficiary to be required in a payment message being used to initiate/process an EFT, funds transferred by customers through their bank accounts electronically for fund transfers using different channels like ATMs, internet and mobile banking etc.

These regulations highlight the originator, Payment System Operator /Payment Service Provider (PSP) and Beneficiary responsibilities, Preauthorized Transfers, Compensation Policy for unauthorized and / or delayed EFT, Disclosure requirement, Periodic Statement, Dispute Resolution process and Record Retention and Reporting requirement etc.

The regulations fix the responsibilities of originating and beneficiary Authorized Financial Institutions for the completion of transactions and settlement.

According to the regulations the Originating/Beneficiary AFIs shall be liable to its consumer for any unauthorized transaction, loss and/or damages caused by the failure of an electronic fund transfer system or equipment to complete a transaction accepted by a terminal. AFIs shall pay the mark up at rate of 3 percent above the SBP policy rate to their consumer for the period of delay subject to determination and notification of the error.

The originator AFIs would be responsible to activate EFT services for only those payment instruments and channels against which consumer’s consent has been obtained. The consent from existing consumers should also be obtained for the purpose of regularization. AFIs will be liable for refund to consumer resulting from unauthorized transactions due to security breaches, control failures and/or negligence form their end.

Beneficiary’s AFIs would bee responsible to reverse the EFT immediately in case beneficiary notifies the bank about the incorrect credit in his/her account. They are also liable to put in place effective systems to identify suspicious EFT transactions.

As per the regulations AFIs will only allow preauthorized transfers upon the request of consumer through appropriate means after necessary consumer due verifications. They will notify the consumer, either through email or SMS or any other appropriate means, about the execution of preauthorized transfers.

AFIs shall provide the periodic statements of the accounts to its accountholders at least once in a month electronically or through other appropriate means as consented by consumer.

AFIs are bound to maintain a functional and fully equipped Customer Service Support Centre that is able to handle EFT related queries, issues and disputes.

AFIs/PSOs/PSPs will keep a record of complaints and its resolutions for a time frame of at least five years and will make available records of complaints to State Bank of Pakistan or any other body authorized by it, as and when required. However, record of complaints under investigation by any Law Enforcement Agency, challenged in honorable court of law etc. should be retained till the resolution/ verdict of the case or as required by the law, according to the regulations.

Published in Daily Times, May 10^th 2018.