MCB Bank has lost six appeals in a Rs. 21.67 million fraud case involving customers at its Haji Pura branch in Sialkot. Despite the rulings, affected customers say they have not received their compensation.
The Banking Mohtasib Pakistan directed the bank to compensate six customers for their financial losses. The orders also included applicable profit on the disputed amounts.
However, the bank challenged the decisions before the President’s Secretariat. All six appeals were dismissed between July 30 and August 25, 2026.
The complainants maintain that the ordered payments remain outstanding.
MCB Bank Fraud Case Involves Alleged Parallel Banking
According to the presidential orders, the bank’s internal investigation uncovered an alleged parallel banking operation.
Former branch manager Saeed Arif was accused of conducting unauthorized financial transactions at the Haji Pura branch.
Investigators found that customers were allegedly issued fake Term Deposit applications and certificates.
These documents reportedly created the impression that their money had been invested in legitimate banking products.
Customers also allegedly provided cheques for routine banking transactions. However, some cheques were reportedly used to withdraw money without authorization.
Investigators further identified suspected transfers to an account associated with a relative of the former branch manager.
The bank also initiated disciplinary proceedings against other employees following its internal investigation.
Woman Allegedly Loses Millions After Selling Her House
One significant complaint involved a woman named Mussarat, who had deposited Rs. 9 million after selling her house.
According to the case record, approximately Rs. 9.5 million was later withdrawn through disputed cheques.
Mussarat, who is unable to read or write, maintained that she had never signed those cheques. Her chequebook was reportedly discovered inside a bank official’s drawer during the investigation.
Other complainants reported individual losses ranging from approximately Rs. 1.41 million to Rs. 3.6 million.
Their complaints involved allegedly fraudulent deposit certificates, stamped receipts, and cash transactions that were not properly recorded.
Banking Mohtasib Rejects Bank’s Defense
During the proceedings, MCB argued that the customers had personally dealt with the former branch manager.
The bank maintained that it should not be responsible for transactions conducted outside authorized banking procedures.
However, the Banking Mohtasib rejected this argument.
The decisions relied on legal principles concerning a bank’s responsibility for employee misconduct during employment.
The rulings directed the bank to compensate the affected customers.
Similar legal questions arose in a 2019 Sindh High Court judgment involving disputed customer deposits at MCB branches.
Those cases included an illiterate widow whose Rs. 600,000 deposit was allegedly misappropriated.
The court upheld the Banking Mohtasib’s authority to investigate complaints and award compensation.
Compensation Deadlines Expire as Customers Seek Enforcement
Under Section 82E of the Banking Companies Ordinance, banks must implement Banking Mohtasib findings within 40 days.
When an appeal is filed, the implementation period begins after the appeal is decided.
The compliance deadlines in the six Sialkot cases reportedly expired between September 8 and October 4, 2026.
However, the complainants say they have not received the ordered payments.
They have submitted execution applications seeking enforcement of the decisions. Their lawyer, Mian Faizan Ali, has also indicated that a legal notice is being served on the bank.
Failure to comply with final orders may expose financial institutions to regulatory action and penalties.
Investigation Reveals Complaints Worth Rs. 76.29 Million
The six compensation cases may represent only a portion of the alleged financial irregularities.
According to figures cited during the proceedings, 44 customers filed complaints involving 54 transactions.
The combined value of those disputed transactions reached approximately Rs. 76.29 million. The Federal Investigation Agency registered FIR No. C-207/2025 in March 2025.
Authorities subsequently arrested former branch manager Saeed Arif.
However, Arif has not been convicted, and the allegations remain subject to legal proceedings.
Bank Reports Billions in Profit as Victims Await Payment
The compensation dispute comes as the bank continues to report substantial financial earnings.
MCB recorded Rs. 26.5 billion in standalone profit after tax during the first half of 2026.
The bank also announced a second interim cash dividend of Rs. 9 per share.
Based on its first-half earnings pace, the Rs. 21.67 million compensation represents roughly three and a half hours of reported profit.
For the affected customers, however, the disputed funds represent significant personal savings.
The complainants continue seeking enforcement of the compensation orders while awaiting payment.
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The case highlights concerns about banking oversight, employee accountability, and the protection of customer deposits.
