Role of the State Bank of Pakistan in Preventing and Responding to Banking Fraud under Legal Frameworks

Abstract

This article examines how the State Bank of Pakistan prevents and responds to banking fraud. The SBP uses laws like the State Bank of Pakistan Act, 1956; the Banking Companies Ordinance, 1962 the Anti-Money Laundering Act, 2010; and the Payment Systems and Electronic Fund Transfers Act, 2007. The SBP has measures to prevent fraud. These include rules for banks checking on banks, making sure customers are who they say they are Know-Your-Customer (KYC) and keeping an eye on cyber threats. The SBP also helps banks deal with fraud by investigating, punishing those who commit fraud, and helping customers who have been affected. However, the SBP faces challenges. These include new and complex cyber threats, not coordination between institutions, and not enough awareness among the public. The article concludes that the SBP plays a role in keeping the banking sector stable. To deal with modern financial fraud the SBP needs to keep updating its rules using new technologies and working with others.