Karachi: The State Bank of Pakistan (SBP) Saturday advised all banks to assess adequacy and implementation of their internal control procedures pertaining to encashment of cheques in order to prevent financial loss and mitigate associated reputational risk to the institution which can potentially arise from fraudulent cheques encashment practices.
SBP’s Consumer Protection Department received series of complaints wherein some unscrupulous elements are defrauding general public through “cheque washing”, a practice wherein text of a cheque is erased by chemicals and then rewritten with a new payee and amount. Impact of such alteration on surface of cheque is difficult or sometimes impossible to detect with naked eye.
To address these complaints effectively, SBP asked all banks that in addition to conformity with Clearing Bank Specification (CBS) -1 as specified in BPD Circular No.19, dated June 25, 2003, effective equipment such as ultraviolet lamps be deployed at the branches, according to CPD circular No.2 of July 2, 2011.
Banks/DFIs should train their front-desk staff to assess authenticity of cheques. Prudence should be exercised while making payments against cheques, and especially against bearer cheques. In addition, banks/DFIs have also been advised to strictly adhere to guidelines on internal controls and instructions relating to opening and operations of accounts issued by SBP from time to time, the circular added.
Dear TNT Reader,
At The News Tribe, our mission is to bring you free, independent, and unbiased news and content that keeps you informed and empowered. We are committed to upholding the highest standards of journalism, as we understand that we are a platform for truth.
Apart from independent global news coverage, we also commit our unique focus on the Muslim world. In an age marked by the troubling rise of Islamophobia and widespread misrepresentation of Muslims in Western media, we strive to provide accurate and fair coverage.
But to continue doing so, we need your support. Even a small donation of 1$ can make a big difference. Your contribution will help us maintain the quality of our news and counteract the negative narratives that are so prevalent.
Please consider donating today to ensure we can keep delivering the news that matters. Together, we can make a positive impact on the world, and work towards a more inclusive, informed global society.
Donate Monthly Subscription Annual Subscription