FIA unearths bank fraud including counterfeiting

Finds forensic evidence of DIB officials’ involvement in forging signatures, documents

ISLAMABAD:

The Federal Investigation Agency disclosed on Wednesday that a forensic report has established that officials of Dubai Islamic Bank (DIB) were involved in forging documents and depriving depositors of their money – in a disclosure that brings into question the credibility of the banking system.

Additional Director General of FIA, Mujahid Akbar Khan, briefed the Senate Standing Committee on Finance on the progress of a Rs410 million fraud that DIB bank’s officials allegedly committed against a family, depriving them of their hard earnings. Senator Saleem Mandviwalla of the Pakistan People’s Party (PPP) chaired the meeting.

“We have received the forensic report, which established that the bank’s staff forged the signatures and withdrew money from their accounts,” said the additional director-general in testimony before the standing committee.

Akbar said that the FIA has decided to register a First Investigation Report (FIR) against the staff of DIB, saying there was negligence on the part of the bank.

This is the second fraud with depositors to have surfaced in recent months and come to the level of the Senate Standing Committee after the banks’ management found protecting their employees instead of taking action against them. Earlier, a similar fraud was reported in another bank.

Justice must be done, and the FIA should investigate DIB officials, said Senator Farooq H Naeek, the former Law Minister and member of the committee.

The additional director-general further said that the FIA was now in possession of “physical evidence of the forgery and about the involvement of the three officials of the bank”. He said that there was evidence of the issuance of fake cheque books, parallel banking, and encashment of fake cheques.

At least seven to 10 employees of the banks are involved in the fraud who issued nine fake cheque books to withdraw money from the accounts, Nazhat Butt, one of the affected depositors, told the standing committee.

Read Rs5bn embezzled, bank manager booked

She said that the bank’s employees started unauthorised cash withdrawals in 2017 which continued for seven years – the period in which she was residing abroad. “In a single day, Rs10.3 million was illegally withdrawn from my account,” said Butt.

Acting CEO of Dubai Islamic Bank, Syed Farhan Ali, told the committee that the bank found the concerned branch manager’s behaviour suspicious in 2022 and subsequently fired him. He said that there were suspicious transactions valuing Rs20.5 million, and the amount was subsequently paid to the depositors.

The acting CEO did not deny the existence of the fraud but said that it was a complicated case. Ali said that the bank received the claim of Rs410 million in 2023, about a year and a half after making the Rs20.5 million payments.

The committee did not accept the CEO’s view and said that the fraud began in 2017, and the bank took action in 2022, that too not to the satisfaction of the victims.

The Additional Director-General of FIA reported that certain documents related to the case were sent for forensic examination, and it was discovered that forgery had been committed through the use of fake signatures and cheques.

The Committee directed the acting CEO of Dubai Islamic Bank to cooperate fully with the FIA. Additionally, the Committee requested a fact-finding report on the issue to be presented in the next meeting on February 21, 2024.

Fahad Butt and his family, who were the victims of the alleged fraud, attended the committee meeting and provided evidence of the alleged wrongdoing.

The FIA is substantiating the victim’s claim. If it is Dubai Islamic Bank, should we sell our sovereignty and let it swindle the depositors, questioned Senator Farooq Naeek.

Published in The Express Tribune, February 15^th, 2024.

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