Unraveling the Web of Deception: A Deep Dive into Banking Frauds and Forgeries in Pakistan

By Mehak Younus, Researcher, Department of Management Sciences, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, Karachi, Pakistan

Introduction

In the intricate world of finance, trust and integrity form the bedrock of any transaction. Regrettably, in Pakistan’s banking sector, this foundation has been undermined by a burgeoning wave of deception – banking frauds and forgeries. This report aims to shed light on the types, root causes, and impact of these malfeasances within the industry. By exploring the roles of employees and the remedial measures underway, we aim to provide a comprehensive understanding of this pressing issue.

Prevalence of Banking Frauds and Forgeries

According to recent studies, the Pakistani banking sector has been grappling with a significant rise in fraudulent activities. Estimated losses from these deceitful acts reached billions of rupees in 2020 alone. [1]

Insights from Industry Experts and Officials

To delve deeper into this issue, interviews were conducted with key personnel from the fraud/compliance/risk departments at various commercial banks as well as officials from the inspection and policymaking departments at the State Bank of Pakistan (SBP). [1]

Enforcement of SBP Regulations

Despite the SBP’s efforts to prevent fraud, a substantial number of financial institutions appear to be non-compliant with the proposed preventive measures. [1]

Recommended Regulations

The SBP has imposed regulations aimed at minimizing the risk of fraud. However, their enforcement leaves much to be desired. [1]

Institutional Responses to the Fraud Trend

Commercial banks are taking matters into their own hands by enhancing their internal protective measures and refining their risk management practices. [1]

SBP’s Initiatives to Battle Fraud

The regulatory body is taking steps through education and awareness campaigns, as well as the development of more robust regulatory frameworks. [1]

Impact of the Research

This research offers valuable insights to stakeholders, including bank managers, risk management departments, risk avoidance policymakers, bank shareholders, depositors, borrowers, and government agencies. [1]

Keywords

Banking forgeries
Banking frauds
Employee forgeries
Employee frauds
Pakistan banking industry
Actions and precautions

References

[1] Younus, M. (2021), “Unraveling the Web of Deception: A Deep Dive into Banking Frauds and Forgeries in Pakistan and Precautions Taken Against,” Journal of Financial Markets and Institutions, Vol. 13 No. 2, pp. 215-225. https://doi.org/10.1108/JFMI-11-2019-0063.