Payment Systems and Electronic Fund Transfers Act, 2007

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THE PAYMENT SYSTEMS AND ELECTRONIC FUND 
TRANSFERS ACT, 2007 
 
 
 
 
 
 
 
CONTENTS 
 
CHAPTER I 
PRELIMINARY 
1. Short title, extent and commencement. 
2. Definitions. 
3. Powers of the State Bank. 
CHAPTER II 
PAYMENT SYSTEMS AND THEIR OPERATION 
4. Designation of Payment System. 
5. Revocation of Designation of Payment System. 
6. Real Time Gross Settlement (RTGS) System. 
7. Requirement for Retention of Electronic Record. 
8. Disqualification of Staff. 
9. Effect of Disqualification. 
10. Governance Arrangements. 
11. Operational Arrangements. 
CHAPTER III  
PAYMENT INSTRUMENTS 
12. Designation of Payment Instrument. 
13. Issuing of Designated Payment Instruments. 
14. Prohibition of Issuance of Payment Instruments. 
15. Security. 
16. Third Party. 
17. Payment by Truncated Cheque. 
CHAPTER IV 
CLEARING AND OTHER OBLIGATIONS 
18. Clearing Houses, Audit and Inspection. 
19. Notice Required of Significant Changes. 
20. Participants Responsible Where Clearing House Fails to Comply, etc. 
 

 
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21. Settlement Provisions. 
22. Rights, etc. Not Subject to Stay. 
23. Settlement Rules. 
24. Electronic Money Institution. 
25. Preservation of Rights, etc. 
 
CHAPTER V 
SUPERVISORY CONTROL OF THE STATE BANK. 
26. Issuance of Model Clauses. 
27. Modification of Requirements. 
28. Service Providers Other Than Financial Institutions. 
29. Requirement of Notice. 
30. Terms and Conditions of Transfers. 
31. Notification of Changes. 
CHAPTER VI  
DOCUMENTATION OF TRANSFERS 
32. Availability of Documentation and Proof. 
33. Periodic Statement. 
34. Documentation as Evidence. 
35. Preauthorized Transfers. 
CHAPTER VII  
NOTIFICATION OF ERROR 
36. Notification of error. 
37. Correcting Error. 
38. Absence of Error. 
39. Triple Damages. 
CHAPTER VIII  
LIABILITY OF PARTIES 
40. Consumer’s Liability. 
41. Burden of Proof. 
42. Liability in Case of Extension of Credit. 
43. Liability of Financial Institutions/Authorized Parties. 
44. Force Majeure. 
45. Intent. 
46. Prohibition on Improper Issuance. 
47. Exceptions. 
48. Suspension of Obligation. 
49. Waiver of Rights. 
CHAPTER IX  
ACTION BEFORE THE COURT 
 
50. Damages. 
51. Bonafide Error. 
52. Actions Taken in Good Faith. 
 
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53. Notification to Consumer Prior to Action. 
54. Action in Bad Faith. 
55. Jurisdiction of Courts. 
56. Criminal Liability. 
57. Violations Affecting Electronic Commerce. 
58. Cheating by Use of Electronic Device. 
CHAPTER X 
MISCELLANEOUS 
59. Act to override Law of Insolvency. 
60. Operator of Designated Payment System Insolvent. 
61. Application of Fine. 
62. Power to Investigate. 
63. Trial of Offence. 
64. Application to acts done outside Pakistan. 
65. Offences to be non­cognizable etc. 
66. Procedure. 
67. Overriding Effect. 
68. Removal of Difficulties. 
69. Power to Call for Information. 
70. Secrecy and Privacy. 
71. Complaint Resolution. 
72. Suspension of Operation. 
73. Immunity of the State Bank and its Employees, etc. 
74. Penalties. 
  
 
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THE PAYMENT SYSTEMS AND ELECTRONIC FUND TRANSFERS ACT, 
2007 
ACT No. IV OF 2007 
[30 June, 2007] 
An  
Act  
to provide regulatory framework for payment systems and electronic fund transfers 
WHEREAS it is necessary to supervise and regulate Payment Systems and Electronic Fund  
Transfers in Pakistan and to provide standards for protection of the consumer and to determine 
respective righ ts and liabilities of the financial institutions and other Service Providers, their 
consumers and participants; 
It is hereby enacted as follows: 
CHAPTER I 
PRELIMINARY 
1. Short title, extent and commencement. __ (1) This Act may be called the Payment 
Systems and Electronic Fund Transfers Act, 2007. 
(2) It extends to the whole of Pakistan. 
(3) It shall come into force at once. 
2. Definitions.__  In this Act, unless there is anything repugnant in the subject or context,__ 
(a) “Accepted Card” means a card, code or other means of access to a Consumer’s 
Account for the purpose of initiating Electronic Fund Transfers; 
(b) “Access Code” includes pin, password or code, which provides a means of 
access to a Consumer’s Account for the purpose of initiating an Electronic Fund 
Transfer; 
(c) “Account” means, a current deposit, saving deposit, or any other account 
maintained by a consumer in a Financial Institution in which credits and debits 
may be effected by virtue of Electronic Fund Transfers; 
(d) “Authorized” means authorized by the State Bank for the purposes of this Act; 
(e) “Automated Teller Machine (ATM) Card” means any card for use at any ATM 
to initiate Electronic Fund Transfers; 
(f) “Authorized Party” means a bank, a Financial Institution, a  Clearing House, a 
Service Provider or any person authorized by the State Bank to transact business 
under this Act in Pakistan; 
 
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(g) “Automated Teller Machine (ATM) Operator” means any person or a Financial 
Institution operating any ATM at which consumers initiate Electronic Fund 
Transfers; 
(h) “Bank” means a banking company as defined in section 5 of the Banking 
Companies Ordinance, 1962 (LVII of 1962); 
(i) “Book Entry Government Securities” means any securities issued by the 
Government under any written law transferable by a book­entry on a register or 
otherwise; 
(j) “Business Day” means any day on which offices of consumers, Financial 
Institutions, operators or Service Providers involved in Electronic Fund 
Transfer are open to the public; 
(k) “Card” means any card including an ATM card, Electronic Fund Transfer point 
of sale card, debit card, credit card or stored value card, used by a Consumer to 
effect an Electronic Fund Transfer; 
(l) “Cheque in the Electronic Form” means a cheque which contain s the exact 
image of a paper cheque in electronic form and is generated, written and signed 
in a secure system ensuring minimum safety standards as may be prescribed by 
the State Bank; 
(m) “Clearing House” means corporation, company, association, partnersh ip, 
agency or other entity that provides clearing or settlement services for a 
Payment System; 
(n) “Consumer” means any person who or which avails the facility of Electronic 
Fund Transfer; 
(o) “Debit Instrument” means a Card, Access Code, or other device o ther than a 
cheque, draft or similar paper instrument, by the use of which a person may 
initiate an Electronic Fund Transfer; 
(p) “Designated Payment Instrument” means a Payment Instrument designated by 
the State Bank as Payment Instrument under section 12. 
(q) “Designated Payment System” means a Payment System designated by the 
State Bank under section 4 to be a Designated Payment System for the purposes 
of this Act; 
(r) “Electronic” has the same meaning as assigned to it by the Electronic 
Transactions Ordinance, 2002 (LI of 2002); 
(s) “Electronic Fund or Electronic Money” means money transferred through an 
Electronic Terminal, ATM, telephone instrument, computer, magnetic medium 
or any other electronic device so as to order, instruct  or authorize a banking  
company, a Financial Institution or any other company or person to debit or 
credit an account and includes monetary value as represented by a claim on the 
issuer which is stored in an electronic device or Payment Instrument, issued on 
receipt of funds of an amount not less in value than the monetary value issued, 
 
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accepted as means of payment by undertakings other than the issuer and 
includes electronic store of monetary value on a electronic device that may be 
used for making payments or as may be prescribed by the State Bank; 
 
(t) “Electronic Fund Transfer” means any transfer of funds, other than a transaction 
originated by cheque, draft or similar paper instrument, which is initiated 
through an Electronic Terminal, telephonic instrument, point­of­sale Terminal, 
stored value card Terminal, debit card, ATM, computer magnetic tape or any 
other electronic device so as  to order, instruct, or authorize a Financial 
Institution to debit or credit an Account; 
(u) “Electronic Money Institution” means an undertaking , that issues means of 
payment in the form of Electronic Money and is duly authorized to do so; 
(v) “Electronic Payment System” means implementation of Payment System 
Electronically; 
(w) “Electronic Terminal” means an electronic device, operated by a consu mer, 
through which a consumer may initiate an Electronic Fund Transfer; 
(x) “Financial Institution” means a financial institution as defined in the Financial 
Institutions (Recovery of Finances) Ordinance, 2001(XLVI of 2001) and 
includes a banking company o r any other Electronic Money Institution or 
person, authorized by the State Bank in this behalf, that directly or indirectly 
holds an account belonging to a consumer; 
(y) “Government” means the Federal Government or any Provincial Government; 
(z) “Netting” means the conversion into one net claim or one net obligation of 
claims and obligations resulting from transfer orders which a participant either 
issues to, or receives from, one or more other participants with the result that 
only a net claim can be demanded or a net obligation be owed; 
(za)  “Operator” means any financial or other institution or any person, authorized by 
the State Bank to operate any Designated Payment System; 
(zb)  “Participant” means a party to an arrangement that establishes a Payment 
System; 
(zc)  “Payment Instrument” means any instrument, whether tangible or intangible, 
that enables a person to obtain money, goods or services or to otherwise make 
payment; but excludes Payment Instruments prescribed in Negotiable 
Instrument Act, 1881(XXVI of 1881); 
(zd)  “Payment System” inter­alia means a system relating to payment instruments, 
or transfer, clearing, payment settlement, supervision, regulation or 
infrastructure thereof and includes clearing, settlement or transfer of Book Entry 
Government Securities; 
(ze)  “Person” includes a legal person or a body of persons whether incorporated or 
 
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not; 
(zf)  “Preauthorized Electronic Fund Transfer” means an Electronic Fund Transfer 
Authorized in advance; 
(zg)  “Prescribed” means prescribed by rules, circulars, directions, orders or 
bye­laws. 
(zh)  “Real Time Gross Settlement System” means a Payment System which can 
effect final settlement of funds, payment obligations and Book Entry 
Government Securities and instruments on a conti nuous basis during such 
operating hours of a processing day as the State Bank may determine on a 
transaction­by­transaction basis; 
(zi)  “Service Provider” includes an operator or any other Electronic Fund Transfer 
Service Provider. 
(zj)  “State Bank” means the State Bank of Pakistan established under section 3 of 
the State Bank of Pakistan Act, 1956 (XXXIII of 1956); 
(zk)  “Systemic Risk” means the risk that relates to the inability of a participant to 
meet its obligations in the Payment System as they become due or a disruption 
to the Payment System that could, for whatever reason, cause other participants 
in the Payment System to be unable to meet their obligations as they become 
due; and 
(zl)  “Truncated Cheque” means a cheque which is truncated in a sec uresystem, 
during the course of a clearing cycle, by an Authorized Party, whether paying 
or receiving payment, immediately on capture of a scanned image, substituting 
physical movement of the cheque in the original form, and includes a cheque in 
the electronic form.  
3. Powers of the State Bank.__ (1) The State Bank may, generally in respect of this Act, 
or in respect of any particular provision of this Act, or generally in respect of payment systems, the 
conduct of all or any of the Service Providers, Oper ators of Payment Systems or issuers of Payment 
Instruments, issue such rules, guidelines, circulars, bye­laws, standards or directions as it may consider 
appropriate. 
 
(2) The State Bank may, by written notice, require an operator of a Designated Payment 
System or issuer of Designated Payment Instrument to make modifications or alterations to– 
 
(i) the Designated Payment System or Designated Payment Instrument including 
governance arrangements; 
 
(ii) operational arrangements; 
 
(iii) documents and information submitted by operator of a Payment System or 
issuer of Payment Instruments; 
 
 
 
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(iv) any other documents relating to the Designated Payment System or Designated 
Payment Instrument. 
(3) In exercising its powers under sub­section (1), the State Bank shall have regard to__ 
(i) the Systemic Risk; 
(ii) the object of the State Bank to promote monetary stability and a sound financial 
structure; 
(iii) the interest of the public including market conditions and behaviour; 
(iv) the safety, integrity, efficiency or reliability of the Designated Payment System 
or Designated Payment Instrument including security and operating standards 
and infrastructure arrangements; 
(v) the interests of the Current Participants of the Designated Payment System or 
users of the Designated Payment Instruments; or 
(vi) the interests of persons who, in the future, may want access to the Designated 
Payment System or may want to use the Designated Payment Instrument. 
CHAPTER II 
PAYMENT SYSTEMS AND THEIR OPERATION 
4. Designation of Payment System.__ (1) The State Bank may, if it finds it to be necessary 
in the public interest, by a written order designate a Payment System a Designated Payment System. 
(2) The State Bank may, in considering whether to designate a Payment  System as a 
Designated Payment System, inspect the premises, equipment, machinery, apparatus, books or other 
documents, or accounts and transactions relating to the Payment System. 
5. Revocation of Designation of Payment System.__ (1) The State Bank may revoke the 
designation of a Designated Payment System if it is satisfied that__ 
(i)  the Designated Payment System has ceased to operate effectively as a Payment 
System; 
(ii) the operator of the designated system has knowingly furnished information or 
documents to the State Bank in connection with the designation of the Payment 
System, which is or are false or misleading in any material particular; 
(iii) the operator or settlement institution of the Designated Payment System is in 
the course of being wound up or otherwise dissolved, whether in Pakistan or 
elsewhere; 
(iv) any of the terms and conditions of the designation or requirements of this Act 
has been contravened; or 
(v) the State Bank considers that it is in the public interest to revoke the designation. 
 
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(2) The State Bank shall not revoke a designation without giving the operator of the 
Designated Payment System an opportunity to be heard; 
Provided that the State Bank may, if an immediate systemic risk is involved, suspend the 
designation of a Payment System without notice pending the final order. 
6. Real Time Gross Settlement (RTGS) System.__ (1) The State Bank may establish and 
operate one or more Real Time Gross Settlement Systems for the transfer of funds and settlement of 
payment obligations as approved by it. 
(2) A settlement system may be linked to another Payment System in Pakistan or elsewhere 
for the clearing or settlement of payment obligations, securities or instruments, whether or not such 
Payment System is operated on a real time gross settlement basis. 
(3) The State Bank may enter into agreements with participants of a settlement system and 
issue to the participants, in writing, rules for the operation of the settlement system. 
(4) The State Bank may, if it considers it necessary in the interest of the Payment System, 
stop or suspend the operation of the Payment System or stop or suspend the privileges or right of any 
participant or class of participants. 
(5) Without prejudice to the generality of sub­section (3), the rules provided for in the said 
sub­ section, may provide__ 
(i) for the conduct of participants; 
(ii) for the authentication of transactions carried out electronically; 
(iii) for the appointment of auditors or inspectors for the auditing or inspection of 
the operating systems of participants in respect of the settlement system; and 
(iv) for the payment of fees to the State Bank. 
7.  Requirement For Retention of Electronic Record.__ Financial Institutions or other 
Authorized Parties providing funds transfer facility shall be required to retain complete record of 
electronic transactions in electronic form in the same manner as provided in section 6 of the Electronic 
Transactions Ordinance, 2002 (LI of 2002) for a period as may be determined by the State Bank. 
8. Disqualification of Staff.__ (1) No person shall be appointed to serve in any capacity 
by an operator of a Designated Payment System if – 
(i) such person has been adjudged a bankrupt, or has suspended payments, or has 
compounded a debt with his creditors, whether in or outside Pakistan, within 
ten years prior to the date of the appointment; or 
(ii) such person has been convicted of an offence under this Act or committed any 
other offence involving moral turpitude or such an offence has b een 
compounded against him. 
(2) Any person being the chairman, director, chief executive, by whatever name called, or 
official liquidator, or an officer of a designated payment system mismanages the affairs of the payment 
system or misuses his position for  gaining direct or indirect benefit for himself or any of his family 
 
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members or any other person, shall be disqualified to serve in any capacity in a designated payment 
system. 
9. Effect of Disqualification.__ (1) Where a person becomes disqualified, as provided for 
in the foregoing provisions, after his appointment – 
(i) he shall immediately cease to hold office; and 
(ii) the operator of the Designated payment System shall immediately terminate his 
appointment. 
(2) Any person disqualified under section 8, notwithstanding any contract of service, shall 
not be entitled to claim any compensation for his loss of office or termination of appointment. 
10. Governance Arrangements. __ The operator of a Designated Payment System shall 
establish adequate governance arrangements which are effective, accountable and transparent  or 
which may be required by the State Bank to ensure the continued integrity of such designated Payment 
System. 
11. Operational Arrangements. __ An Operator of a Designated Paym ent System shall 
establish the following operational arrangements: 
(i) rules and procedures setting out the rights and liabilities of the operator and the 
participant and the financial risks the participants may incur; 
(ii) procedures, controls and measures for the management of credit, liquidity and 
settlement risk, including rules determining the time when a payment instruction 
and a settlement is final; 
(iii) criteria for participation in the Designated Payment System; and 
(iv) measures to ensure the saf ety, security and operational reliability of the 
Designated Payment System including contingency arrangements. 
CHAPTER III  
PAYMENT INSTRUMENTS 
12. Designation of Payment Instrument.__ (1) Where the State Bank is of the opinion that  
(i) a Payment Instrument is or may be in widespread use as a means of making 
payment and may affect the Payment Systems of Pakistan; and 
(ii) it is necessary to protect the interest of the public or it is n ecessary to maintain 
the integrity, efficiency and reliability of a Payment Instrument, the State Bank 
may prescribe such Payment Instrument as a Designated Payment Instrument. 
(2) Where a Payment Instrument is prescribed as a Designated Payment Instrument , the 
issuer of such Designated Payment Instrument shall comply with the requirements of section 13 within 
such period as the State Bank may specify. 
13. Issuing of Designated Payment Instruments. __ (1) No person shall be issued a 
 
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Designated Payment Instrument unless the issuer has – 
(i) complied with the requirements of this Act; 
(ii) submitted to the State Bank the documents and information as may be 
prescribed thereby; 
(iii) paid the fee Prescribed by the State Bank; and 
(iv) obtained a written approval from the State Bank to issue a Designated Payment 
Instrument. 
 
(2) The State Bank may in giving its approval,__ 
(i) require all or any of the documents submitted to be modified and altered as it 
may deem necessary; and 
(ii) impose such restrictions, limitations or conditions as it may deem fits. 
(3) Any Payment Instrument so issued should carry minimum security features to make its 
usage secure as per the current international standards. 
14. Prohibition of Issuance of Payment Instruments.__ (1) The State Bank may, by a 
written order, prohibit any person from issuing or using any Payment Instrument if, in its opinion – 
(i) the issuing or use of the Payment Instrument is detrimental to the reliable, safe, 
efficient and smooth operation of the Payment Systems of Pakistan or monetary 
policy of the State Bank; 
(ii) the prohibition is in the interest of the public; or 
(iii) the Payment Instrument has been issued with an object to entice or defraud the 
public. 
(iv) the Person has, in t he opinion of the State Bank, failed to comply with the 
requirements  of this Act. 
(2) The State Bank may, in considering whether to prohibit any Person from issuing or 
using any Payment Instrument, inspect the premises, equipment, machinery, apparatus, books or other 
documents, or accounts and transactions of the issuer of the Payment Instrument. 
(3) Any Person causing or attempting to cause obstruction to an officer or representative 
of the State Bank in inspection of the premises or equipment shall, upon  complaint made to a court 
having jurisdiction, be liable to punishment which may extend to three years imprisonment of either 
description or with fine which may extend to five million rupees or with both. 
(4) The State Bank shall before passing an order u nder this section, give such Person a 
reasonable opportunity to make representation before it; 
Provided that State Bank may, in appropriate cases, without notice direct a Person to 
 
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immediately stop issuing a Payment Instrument, pending the final order. 
15. Security.__ Financial Institutions and other institutions providing Electronic Funds 
Transfer facilities shall ensure that secure means are used for transfer, compliant with current 
international standards and as may be prescribed by the State Bank from time to time. 
16. Third Party.__ If a person other than a Financial Institution is holding a Consumer ’s 
Account the State Bank shall by instructions ensure that the disclosures, required to be made for 
Electronic Fund Transfers, and the protections, resp onsibilities and remedies created by this Act, are 
made applicable to such Persons and services. 
17. Payment by Truncated Cheque. __ (1) Notwithstanding anything to the contrary 
provided in the Negotiable Instruments Act, 1881 (XXVI of 1881), or any other law, for the time being 
in force, Electronic Fund Transfers may be initiated by an Authorized Party by means of a truncated 
cheque. 
(2) In case, any transfer of funds takes place in the manner as provided in sub­section (1), 
the original cheque shall cease to be negotiable. 
(3) Validity of a cheque shall not be affected if for any technical reason or otherwise, 
transfer of funds as provided in sub­section (1) fails to take effect. 
(4) If transfer of funds does not take effect as provided in sub­section  (3), the Bank or the 
Authorized Financial Institution concerned may require physical delivery of the cheque from the 
originator. 
CHAPTER IV 
CLEARING AND OTHER OBLIGATIONS 
18. Clearing Houses, Audit and Inspection. __ (1) The State Bank may nominate one or 
more Clearing Houses to provide clearing or settlement services for a Payment System on such terms 
and conditions as may be determined by it. 
(2) The State Bank may, for the purposes of carrying out its functions und er this Act, 
conduct audits and inspections of Clearing Houses, and the Clearing House shall, as required, assist 
the State Bank to the extent necessary to enable it to carry out an audit or inspection. 
(3) Auditors for carrying out the purposes provided for in sub­section (1) shall be appointed 
with prior approval in writing of the State Bank. 
19. Notice  Required  of Significant Changes.__ Every  Clearing House  shall,  in  respect  
of its Designated Payment System, provide the State Bank with reasonable notice of not less than 
fifteen Business Days in advance of any change to be made by the Clearing House that is of a 
significant nature  in  relation  to  the  Designated  Payment  System  and  without  limiting  the  
generality  of the foregoing, the notice shall be provided in respect of any change affecting__ 
(a) the legal documents and bye­laws of the Clearing House; 
(b) the operation of the Designated Payment System; 
(c) the bye­laws, agreements, rules, procedures, guides or other documentation 
 
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governing the Designated Payment System; 
(d) the composition of a board of directors of the Clearing House due to resignation 
or otherwise; or 
(e) the appointed auditor of the Clearing House. 
20. Participants Responsible  Where  Clearing House  Fails to Comply, etc. __ Where 
Clearing House fails to comply with the obligations imposed on it under this Act in respect of its 
Payment System or otherwise contravenes the provisions of this Act, the Participants jointly and 
severally shall comply with those obligations in the same manner and to the same extent as if the 
participants were the Clearing House on which the obligations are imposed or they committed the 
contravention. 
21. Settlement Provisions.__ (1) Notwithstanding anything to the contrary provided in this 
Act or any other law for the time being in force, the settlement rules of a Designated Payment System 
shall be valid and binding on the operator and the participants and any action may be taken or payment 
made in accordance with the settlement rules. 
(2) Where the settlement rules of a Designated Payment System provide that the settlement 
of a payment obligation through an entry to or a payment out of an Account of a Participant or a 
Clearing House at the State Bank is final and irrevocable the entry or payment shall not be required to 
be reversed, repaid or set aside. 
22. Rights, etc., Not Subject to Stay. __ (1) The rights and remedies of a participant, a 
Clearing House, or the State Bank in respect of collateral granted to it as security for a payment or the 
performance of an obligation incurred in a Designated Payment System may not be the subject of any 
stay to be granted by any court or order affecting the ability of creditors to exercise rights and remedies 
with respect to the collateral. 
23. Settlement Rules . __ (1) The State Bank may make “settlement rules” to provide the 
basis on which payment obligations are calculated, netted or settled including rules for the  taking of 
action in the event that a participant is unable or likely to become unable to meet its obligations to the 
Clearing House, or to the other participants. 
(2) Every participant and Clearing House shall, in respect of its Designated Payment 
System, provide the State Bank with such information, at such times and in such form as the State 
Bank may require in writing. 
24. Electronic  Money Institution.__ (1) An applicant that wants to become an Electronic 
Money Institution shall submit an application to the State Bank for issue of a license to perform 
Electronic Money activity. 
(2) An Electronic Money Institution may perform only such activities as are sp ecified in 
its license. 
25. Preservation of Rights, etc. __ (1) Except to the extent, expressly provided, this Act 
shall not operate to limit, restrict or otherwise affect__ 
(i) any right, title, interest, privilege, obligation or liability of a person resu lting 
from any transaction in respect of a transfer order which has been entered into 
a Designated Payment System; or 
 
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(ii) any investigation, legal proceeding or remedy in respect of any such right, title, 
interest, privilege, obligation or liability. 
(2) Nothing in this Act shall be construed to require,__ 
(i) the unwinding of any Netting done by the operator of a Designated Payment 
System, whether pursuant to its default arrangements or otherwise; 
(ii) the revocation of any transfer order given by a participant which is entered into 
a Designated Payment System; or 
(iii) the reversal of a payment or settlement made under the rules of a Designated 
Payment System. 
CHAPTER V 
SUPERVISORY CONTROL OF THE STATE BANK 
26. Issuance  of Model  Clauses.__ The State Bank may issue model clauses for use by the 
Financial Institutions and Authorized Parties to facilitate compliance with the disclosure requirements 
as specified in section 29 and to aid consumers in understanding the rights and responsibilities of 
participants in Electronic Fund Transfers by utilizing readily understandable language. 
27. Modification of Requirements. __ Instructions issued by the State Bank may provide 
for such adjustments and exceptions for any class of Electronic Fund Transfers, as in th e opinion of 
the State Bank are necessary or proper for the purposes of this Act, to prevent circumvention or evasion 
thereof, to facilitate compliance therewith and to alleviate any undue compliance burden on small 
Financial Institutions. 
28. Service Providers Other Than Financial Institutions. __ The State Bank shall 
determine, which provisions of this Act, subject to any modifications, adjustments or exceptions as 
provided for in section 26, shall apply to a person other than a Financial Institution, holding a 
Consumer’s Account. 
29. Requirement of Notice.__ (1) The instructions issued by the State Bank under section 
3 shall require any ATM Operator or any other Service Provider who imposes a fee on any consumer 
for providing services to such consumer, to provide notice in accordance with sub­sections (2) and (3) 
to the consumer of the fact that – 
(i) a fee is imposed by such operator or Service Provider for providing the service; 
and 
(ii) the amount of any such fee. 
(2) The notice required by sub­section (1) with respect to any fee shall be posted at a 
prominent and conspicuous location on or at the ATM or other Electronic Terminal at which the 
consumer initiates the Electronic Fund Transfer. 
(3) The notice required under sub­section (1) with r espect to charging of fee shall appear 
on the conspicuous part of the ATM or Electronic Terminal in the manner as may be determined and 
notified by the State Bank in this behalf. 
 
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(4) No fee may be imposed by any ATM Operator or other Service Provider, as t he case 
may be, in connection with any Electronic Fund Transfer initiated by a consumer for which a notice is 
required under sub­section (1), unless the consumer receives such notice in accordance with sub­ 
sections (2) and (3) and such consumer elects to continue in the manner necessary to effect the 
transaction after receiving such notice. 
30. Terms  and  Conditions of Transfers. __ (1) The terms and conditions of Electronic 
Fund Transfers involving a Consumer’s Account shall be disclosed by a Financial Institution, operator 
or other Authorized Party in English and in a manner clearly understood by the consumer, at the time 
the Consumer contracts for an Electronic Fund Transfer service, in accordance with the instructions of 
the State Bank. 
(2) Such disclosures may include the following, namely:__ 
(i) the Consumer’s liability for unauthorized Electronic Fund Transfers and, at the 
option of the Financial Institution or Authorized Party or Operator, notice of the 
advisability of prompt reporting of any loss, theft, or unauthorized use of a Card, 
Access Code or other means of access; 
(ii) the telephone number and address of the Person or office to be notified in the 
event the Consumer believes that an unauthorized Electronic Fund Transfer has 
been or may be effected; 
(iii) the kind and nature of Electronic Fund Transfers which the Consumer may 
initiate, including any limitations on the frequency or amount of such transfers; 
(iv) any charges for Electronic and Transfers or for the right to make such transfers; 
(v) the Consumer ’s right to stop payment of a Preauthorized Electronic Fund 
Transfer and the procedure to initiate such a stop payment order; 
(vi) the Consumer’s right to receive information of Electronic Fund Transfers under 
section 29; 
(vii) a s ummary, in a form Prescribed by the State Bank, of the error resolution 
provisions of section 36 which, the Financial Institutions, Authorized Parties or 
Operators shall be required to transmit at least once per calendar year; 
(viii) the Financial Institut ion’s, Authorized Party ’s or Operator ’s liability to the 
Consumer; 
(ix) the circumstances under which the Financial Institution, Authorized Party or 
Operator will in the ordinary course of business disclose information concerning 
the Consumer’s Account to third Persons; and 
(x) a notice to the Consumer that a fee may be imposed by an ATM Operator or 
Service Provider, if the Consumer initiates a transfer from an ATM or other 
Electronic Terminal that is not operated by the Person or the Financial 
Institution issuing the Card or other means of access. 
31. Notification of Changes. __ (1) A Financial Institution or any other Authorized party, 
shall notify a Consumer in writing or such other means as may be prescribed by the  State Bank from 
 
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time to time, at least twenty-one days prior to the effective date of any material change in any term or 
condition of the Consumer ’s Account required to be disclosed under sub­section (1) of section 29, 
unless such change is immediately necessary to maintain or restore the security of an Electronic Fund 
Transfer system or a Consumer’s Account. 
(2) Financial Institution shall be required to make a subsequent notification, provided for 
in sub­ section (1), if such a change is made permanent. 
CHAPTER VI  
DOCUMENTATION OF TRANSFERS 
32. Availability of Documentation and Proof. __ For each Electronic Fund Transfer 
initiated by  a Consumer from an Electronic Terminal, the Financial Institution holding such 
Consumer’s Account shall, directly or indirectly, at the time the transfer is initiated, make available to 
the Consumer documentation  and  proof  of  such  transfer,  clearly  setting  forth,  as  may  be  required  
by  such transaction, the following particulars, namely__ 
(i) the amount involved and the date on which the transfer is initiated; 
(ii) the type of transfer; 
(iii) the identity of the Consumer ’s Account with the Financial Institution from 
which or to which funds are transferred; 
(iv) the identity of any third party to whom or from whom funds are transferred; 
(v) the location or identification of the Electronic Terminal involved; and 
(vi) name of the Accountholder from or to which funds are transferred. 
33. Periodic  Statement.__ (1) A Financial Institution shall provide each consumer with a 
periodic statement for each account of such consumer that may be accessed electronically. 
(2) Such statement shall be provided at least once every month, or as required by the 
consumer, or such other period as the State Bank may determine from time to time. 
(3) Such statement shall include all the necessary particulars in respect of the Consumer ’s 
Account and shall clearly set forth the balances in Consumer’s Account at the beginning and the  close 
of the period, the amount of any fee or charge assessed by the Financial Institution during the period, 
for whatever purpose and the address and telephone number to be used by the Financial Institution for 
the purpose of receiving any enquiry or notice of account error from the Consumer. 
34. Documentation as Evidence.__ In any action involving a Consumer or any Participant, 
any documentation required by either section 31 or 32 of this Act to be given to the Consumer, which 
indicates that an Electronic Fund Transfer was made to another Person, shall be admissible as evidence 
of such transfer and shall constitute prima facie proof that such transfer was made. 
35. Preauthorized Transfers. __ (1) A preauthorized Electronic Fund Transfer from a 
Consumer’s Account may be authorized by the Consumer eit her in writing, or in any other accepted 
form. 
 
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(2) A consumer may stop payment of a Preauthorized Electronic Fund Transfer by 
notifying the Financial Institution. 
CHAPTER VII  
NOTIFICATION OF ERROR 
36. Notification of error.__ (1) In this section, the following shall be construed as error, 
namely__ 
(i) an unauthorized Electronic Fund Transfer; 
(ii) an incorrect Electronic Fund Transfer to or from the Consumer’s Account; 
(iii) the omission of an Electronic Fund Transfer from a periodic statement; 
(iv) a computational or book keeping error made by the Financial Institution relating 
to an Electronic Fund Transfer; 
(v) the Consumer’s receipt of an incorrect amount of money from an Electronic 
Terminal; or 
(vi) any other error as determined by the State Bank. 
(2) When an error has occurred, the Financial Institution or the Authorized Party shall 
investigate the alleged error to determine whether an error has occurred, and report in writing the result 
of such investigation to the consumer within ten Business Days. 
(3) The Financial Institution may require written confirmation to be provided to it within 
ten Business Days of an oral notification of error. 
(4) A Financial Institution or Authorized Party shall not be liable to credit a Consumer ’s 
Account in accordan ce with the provisions of section 37 in case no error is found pursuant to 
investigation under sub­section (2) and or the written confirmation required by it is not received by it 
within the ten days period, provided for in sub­section (3). 
37. Correcting Error.__ If the Financial Institution or Authorized Party determines that an 
error did occur, it shall promptly, and in no event later than one Business Day after such determination, 
correct the error, including the crediting of a Consumer’s Account with mark up where applicable: 
Provided that such investigation shall be concluded not later than ten Business Days after 
receipt of notice of the error. 
38. Absence of Error. __ If the Financial Institution or the Authorized Party determines 
after its investigation that an error did not occur, it shall deliver or mail to the consumer an explanation 
of its findings within three Business Days after the conclusion of its investigation, and upon request of 
the consumer promptly deliver or mail to the consumer c opies of all documents which the Financial 
Institution or the Authorized Party relied on to conclude that such error did not occur. 
39. Triple Damages.__ (1) If in any case filed under section 50 of this Act, the court finds 
that a Financial Institution and/or an Authorized Party is guilty of the commission of any act, provided 
for in sub­section (2) or (3) of this section, the Financial Institution, shall in addition to costs incurred 
 
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by the consumer, be further liable to pay to the Consumer, triple damages determined under section. 
 
(2) The Financial Institution or the Authorized Party shall be liable to pay damages, 
provided for in sub­section (1), if it did not re­credit a Consumer’s Account within the ten days period 
specified in section 37 and the Financial Institution and or the Authorized Party did not make a good 
faith investigation of the alleged error or it did not have reasonable basis for believing that the 
Consumer’s Account was not in error. 
 (3) The Financial Institution or the Authorized Party shall also be liable to pay damages, 
provided in sub­section (1), if it knowingly and willfully concluded that the Consumer’s Account was 
not in error when such conclusion could not reasonably have been drawn from the evidence available 
to the Financial Institution or the Authorized Party at the time of its investigation. 
CHAPTER VIII  
LIABILITY OF PARTIES 
40. Consumer’s Liability.__ A consumer shall be liable for any unauthorized Electronic 
Fund Transfer involving the Account of such consumer only if the card or other means of access 
utilized  for such transfer was an Accepted Card or other means of access and if the issuer of such card, 
code or other means of access has provided a means whereby the user of such card, code or other 
means of access can be identified as the person authorized to use it, such as by signature, photograph, 
or finger print or by electronic or mechanical confirmation. 
41. Burden of Proof. __ In any action which involves a consumer ’s liability for an 
unauthorized Electronic Fund Transfer, the burden of proof shall be upon the Financial Institution or 
the Authorized Party to show that the Electronic Fund Transfer  was authorized or, if the Electronic 
Fund Transfer was authorized, then the burden of proof shall be upon the Financial Institution or the 
Authorized Party to establish that the conditions of liability set forth in this Act were met, and the 
disclosures required to be made to the consumer under this Act were in fact made in accordance with 
the provision thereof. 
42. Liability in Case of Extension of Credit.__ In the event of transaction which involves 
both an unauthorized Elect ronic Fund Transfer and an ex tension of credit limit pursuant to an 
agreement between the consumer and the Financial Institution or the Authorized Party, nothing shall 
impose liability upon a consumer for an unauthorized Electronic Fund Transfer in excess of his liability 
for such transfer under any other applicable law or under any agreement with the Consumer’s Financial 
Institution or Authorized Party. 
43. Liability of Financial Institutions/Authorized Parties.— Subject to what is provided 
in this section or section 44, a Financial Institution or the Authorized Party shall be liable to a consumer 
for all damages proximately caused by— 
(i) the Financial Institution’s or Authorized Party ’s failure to make an Electronic 
Fund Transfer, in accordance with the terms and conditions of an Acc ount, in 
the correct amount or in a timely manner when properly instructed to do so by 
the consumer, except where— 
(a) the Consumer’s Account has insufficient funds; 
 
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(b) the funds are subject to legal process or other encumbrance restricting 
such transfer; 
(c) such transfer would exceed an established credit limit; 
(d) as otherwise provided in instructions by the State Bank. 
(ii) the Financial Institution’s or Authorized Party ’s failure to make an Electronic 
Fund Transfer due to insufficient funds when the Financial Institution or 
Authorized Party failed to credit, in accordance with the terms and conditions 
of an Account, a deposit of funds to the Consumer’s Account which would have 
provided sufficient funds to make the transfer; and 
(ii) the Financial Institution ’s or Authorized Party ’s failure to stop payment of 
Preauthorized transfer from a Consumer’s Account when instructed to do so in 
accordance with the terms and conditions of Account. 
44. Force Majeure. __ A Financial Institution, an Auth orized Party, Operator or a 
Participant shall not be liable under clauses (i) and (ii) of section 43 if it shows by a preponderance of 
evidence that its action or failure to act resulted from— 
(i) force majeure or other circumstance beyond its control, tha t it exercised 
reasonable care to prevent such an occurrence, and that it exercised such 
diligence as the circumstances required; 
(ii) a technical malfunction which was known to the Consumer at the time he 
attempted to initiate an. Electronic Fund Transfer  or, in case of Preauthorized 
transfer, at the time such transfer should have occurred. 
45. Intent.__ In case of failure described in clauses (i) and (ii) of section 43 was not 
intentional and it resulted from a bona fide  error, notwithstanding the maintenance of procedures 
reasonably adopted to avoid any such error, the Financial Institution, Authorized Party, operator or the 
participant shall be liable for actual damages proved. 
46. Prohibition on Improper Issuance.  No person may issue to a Consumer any Card, 
code or other means of access to such Consumer’s Account for the purpose of initiating an Electronic 
Funds Transfer other than in response to a request or application therefor; or as a renewal of, or in 
substitution for, an Accepted Card, code or other means of access, whether issued by the initial issuer 
or a successor. 
47. Exceptions.— (1) Notwiths tanding the provisions of section 46, a person may 
distribute to a consumer on an unsolicited basis a card, code or other means of access for use in 
initiating an Electronic Fund Transfer from such Consumer’s account if__ 
(i) such card, code or other means of access is not validated; 
(ii) such distribution is accompanied by a complete disclosure, in accordance with 
section 29 of the Consumers’ rights and liabilities which will apply if such Card, 
code or other means of access is validated; 
(iii) such distri bution is accompanied by a clear explanation, in accordance with 
instructions of the State Bank, that such card, code, or other means of access is 
 
Page 20 of 25 
 
not validated and how the Consumer may dispose of such code, card, or other 
means of access if validation is not desired and such Card, code, or other means 
of access is validated only in response to a request or application from •the 
Consumer, upon verification of the Consumer’s identity. 
(2) For the purpose of this section, a card, code, or other means of access is validated when 
it may be used to initiate an Electronic Fund Transfer. 
48. Suspension of Obligation.__ If a technical malfunction prevents the effectuation of an 
Electronic Fund Transfer initiated by a consumer to another person, and such other person has agreed 
to accept payment by such means, the Consumer ’s obligation to the other person shall be suspend ed 
until the malfunction is corrected and the Electronic Fund Transfer may be completed, unless such 
other Person has subsequently, by written request, demanded payment by means other than an 
Electronic Fund Transfer. 
49. Waiver of Rights. __ No writing or other agreement between a Consumer and any other 
Person may contain any provision which constitutes a waiver of any right conferred or cause of action 
created by this Act, and any such writing waiving any right or cause of action shall be void and of no 
legal effect. 
CHAPTER IX  
ACTION BEFORE THE COURT 
50. Damages. __ Except as otherwise provided by this section or the provisions of this Act, 
any person who fails to comply with any provision of this Act with respect to any other person, except 
for an error resolved in accordance with the provisions of this Act, shall, upon an action brought before 
a court, be liable to such person for payment of an amount equal to the sum of any actual damage 
sustained by that person as a result of such failure. 
51. Bonafide Error. __ Except as provided by section 50, a person may not b e held liable 
in any action brought under this chapter for any violation of this Act if the person shows by 
preponderance of evidence that the violation was not intentional and resulted from a bonafide error 
notwithstanding the maintenance of procedures reasonably adopted to avoid any such error. 
52. Actions Taken  in Good Faith. __ (1) The provisions of section 50 shall not apply to 
any act done or omitted in good faith, or purported to be done in conformity with any rule, instruction 
or interpretation of a pproval by an official of the State Bank duly authorized to issue such 
interpretations or approvals under such procedure of the State Bank as may be prescribed for. 
(2) A Financial Institution or an Authorized Party shall not incur any liability under section 50 
on account of any failure to make a disclosure in proper form, if such institution utilized an appropriate 
model clause issued by the State Bank, notwithstanding the fact that after, such act, omission, or failure 
has occurred. such rule, instructio n, approval or model clause under sub­section (1) was amended, 
rescinded or determined by judicial or other authority as invalid for any reason. 
53. Notification to Consumer Prior to Action. __ A person shall not incur any liability for 
any failure to comply with any requirement under this Act, if prior to the institution of an action under 
this Act, such person notifies the consumer concerned of the failure, complies with the requirements 
of this Act and makes an appropriate adjustment to the Consumer’s account and pays, actual damages 
or, where applicable, damages in accordance with section 39. 
 
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54. Action in Bad Faith. On finding by the court that an unsuccessful action for any alleged 
failure was brought in bad faith or for the purposes of harassment, the court may award to the defendant 
(s) costs of such litigation and the attorney’s fees found reasonable in relation to the work. 
55. Jurisdiction of Courts. — (1) With regard to the amount in controversy, any civil 
action under this Act may be brought in any court of competent jurisdiction. 
(2) The court exercising jurisdiction shall not adjourn the case for more than ten days at a  
time; provided that the aggregate of adjournments granted to the defendant shall not exceed three. 
(3) The court shall announce its judgment within ninety days after notice upon the 
defendant in the case was first served. 
56. Criminal Liability.  Whoever knowingly and wilfully gives fa lse information or 
inaccurate information or fails to provide information which he is required to disclose by this Act or 
any instruction issued thereunder, or otherwise fails to comply with any provision of this Act shall be 
punished with imprisonment of either description which may extend to three years, or with fine which 
may extend to three million rupees, or with both. 
57. Violations Affecting Electronic Commerce.—Whoever— 
(1) knowingly, in a transaction effected by electronic commerce, uses or attempt s or 
conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently 
obtained Debit Instrument to obtain money, goods, services or anything else of value 
aggregating five thousand rupees or more, or 
(2) knowingly receives, conc eals, uses or transports money, goods, services or anything 
else of value aggregating five thousand rupees or more obtained by use of any 
counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained Debit 
Instrument, or 
(3) knowingly re ceives, conceals, uses, sells, or transports one or more tickets for 
transportation, and which have been purchased or obtained with one or more 
counterfeit, fictitious, altered, forged, lost, stolen or fraudulently obtained Debit 
Instrument, 
shall be punished with imprisonment of either description for a term which may extend to seven years, 
or with fine which may extend to one million rupees, or with both. 
Explanation.— For the purpose of this section e­commerce means the activity of buying, selling 
or contracting for goods, services and making payments using internet or worldwide web through 
communication networks including of wireless networks, within or outside Pakistan. 
58. Cheating by Use of Electronic Device. __ Whosoever cheats by pretending to be some 
other person, or by knowingly substituting one person for another, or representing that he or any other 
person is a person other than he or such other person really is, or by cheating by impersonation, 
fraudulently or dishonestly uses any credit or debit card, or code or any other means of access to an 
Electronic Fund Transfer device, and thereby causes any wrongful gain to himself or any wrongful 
loss to any other person, shall be punished with imprisonment of eit her description for a term which 
may extend to seven years, or with fine which shall not be less than the wrongful loss caused to any 
person, or with both. 
 
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CHAPTER X  
MISCELLANEOUS 
59. Act to override Law of Insolvency. — (1) Notwithstanding anything to the  contrary 
provided in the law of insolvency, rights and liabilities of persons arising from transfer orders in this 
Act shall be governed subject to the provisions of this section, in case such person is a participant. 
(2) No transfer order passed under th is Act, any disposition of property in pursuance of 
such order, or the default arrangements of a designated system shall be regarded to any extent as invalid 
on the ground of inconsistency with the law of insolvency. 
(3) No order of the court or any office  holder acting under the law of insolvency shall 
interfere with settlement of a transfer order passed in accordance with the rules of the designated 
system. 
(4) A debt or other liability arising out of a transfer order which is the subject of action 
taken under default arrangements, may not be proved in a bankruptcy or winding up proceedings, or 
may not be taken into account for the purpose of any set­off until the completion of the action taken 
under default arrangements. 
(5) The Netting arrangement shall be valid and enforceable and an operator or participant 
of a designated system shall be required to give effect to such arrangement. 
(6) Nothing in this section shall be construed to require the unwinding of any netting or 
gross payment done by the operator of a Designated Payment System, whether pursuant to its default 
arrangements or otherwise: 
Provided that this section shall not apply in relation to any transfer order which is entered into 
a Designated Payment System after the expiry of the day on which  a court made an order for 
insolvency, judicial management or winding up in respect of the participant, or after a resolution for 
voluntary winding up of the participant was passed. 
Explanation.— In this section “Default Arrangements” means the arrangement s put in place 
.by a designated system to limit systemic and other kinds of risks which arise in the event of a 
participant appearing to be unable, or likely to become unable, to meet its obligations in respect of a 
transfer order, including any arrangements for netting. 
60. Operator of Designated Payment System Insolvent. — (1) Where the State Bank is 
satisfied that any operator of a Designated Payment System is insolvent or likely to become insolvent, 
or has become or likely to become unable to meet all or  any of his obligations, or has suspended 
payments  or compounded with his creditors, or where it is in the public interest, State Bank may:— 
(i) assume control of the whole of the property, business and affairs of the operator 
of the Designated Payment System and carry on the whole of his business and 
affairs and appoint its own officers, or assume control of such part of its 
property, business and affairs and carry on such part of its business and affairs 
as the State Bank may determine, and it may further order that the cost and 
expenses of the State Bank or the remuneration of any Person so appointed by 
the State Bank, may be paid out of the fund s and properties of the operator of 
the Designated Payment System which shall be regarded as the first charge 
 
Page 23 of 25 
 
thereon; and 
(ii) take any action or initiate any proceedings against the operator under the law of 
insolvency, whether or not an order has been m ade under the preceding 
sub­section 
 (2) No order under this section shall be made unless the operator of a Designated Payment 
System or any director or officer of the operator of the Designated Payment System in respect of which 
an order is to be made, or who in pursuance of such order is to be removed from office, has been given 
a reasonable opportunity of making representation against the proposed order: 
Provided that State Bank may, if an immediate systemic risk is involved, take immediate action 
under this section pending the final order. 
61. Application of Fine.  __A court imposing any fine under this Act may direct that the 
whole or any part thereof shall be applied towards compensation to the aggrieved  person for any loss 
caused by the person committing an offence under this Act. 
62. Power to Investigate.—(1) Notwithstanding anything to the contrary provided by any 
other law for the time being in force, any information relating to commission of an offence under this 
Act shall be recorded in writ ing by an officer­in­charge of a police station, generally empowered in 
this behalf under the Code of Criminal Procedure,1898 (Act V of 1898). 
(2) Investigation of offences committed under this Act shall be carried out by an 
officer­in­charge of the police station empowered under the Code of Criminal Procedure, 1898 (Act V 
of 1898) to exercise such powers, including power to examine witnesses, to arrest any person or to 
seize any document or thing or search any place, and do all other acts or things necessa ry for such 
purpose: 
Provided that such officer shall be subject to the same restrictions in respect of any document 
or record of a financial or Electronic Money Institution as is provided in respect of documents in 
custody of a Bank or a banker in section 94 of the Code of Criminal Procedure 1898 (Act V of 1898). 
63. Trial of Offence.—(1) Notwithstanding anything to the contrary provided by any other 
law for the time being in force, offences provided for in Chapter IX of this Act shall be tried by the 
Court of Sessions, having territorial jurisdiction in the case, which shall observe the same procedure 
as provided for trial of offences by the Code of Criminal Procedure,1898 (Act V of 1898). 
(2) Cognizance shall be taken by the court upon a report of facts made in writing by a police 
officer or upon receiving a complaint of facts which constitute the offence. 
(3) In case of a complaint, the court may postpone the issue of process for attendance of 
the person complained against and refer the complaint to the o fficer­in­charge of a police station for 
investigation and report. 
64. Application to acts done outside Pakistan.  __The provisions of this Act shall apply 
notwithstanding the matters being the subject hereof occurring outside Pakistan, in so far as they are 
directly or indirectly connected to, or have an effect on or bearing in relation to persons, Payment 
Systems or events within the territorial jurisdiction of Pakistan. 
 
 
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65. Offences to be non­cognizable etc.  Notwithstanding anything contained in t he Code 
of Criminal Procedure, 1898 (Act V of 1898), all offences under this Act are bailable, non­cognizable 
and compoundable with the permission of the court. 
66. Procedure.—(1) Notwithstanding anything to the contrary provided in this Act or any 
other law for the time being in force, no Court or authority or officer shall take cognizance of any 
offence against this Act which is alleged to have been committed by any person, party, participant, 
Service Provider, operator or Financial Institution or any officer or auditor thereof, who is authorized, 
licensed or designated under the Act, except on the complaint in writing of the State Bank: 
Provided that nothing in this sub­section shall apply to a prosecution by a person, party, 
participant, Service Provider, operator or Financial Institution or any of its officers or employees: 
Provided further that, where the State Bank is itself empowered to impose a penalty or fine, it  
may take cognizance of the offence and start proceedings on the basis of a memorandum of allegations 
placed on record by an officer of State Bank. 
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 
1898), the personal attendance of the complainant before the Court or authority trying the offence shall 
not be necessary unless the Court, for reasons to be recorded, requires his personal attendance  at the 
trial. 
67. Overriding Effect. —This Act shall have effect notwithstanding anything to the 
contrary provided in any other law for the time being in force o r any agreement, contract, 
memorandum, or articles of association. 
68. Removal of Difficulties. If any difficulty arises in giving effect to any provision of this 
Act, the Federal Government may, in consultation with the State Bank, make such order as appears to 
it to be necessary for the purpose of removing the difficulty. 
69. Power to Call For Information. __ (1) The State Bank may direct any Financial 
Institution or Service Provider or any other Authorized Party to give or furnish to the State Bank, 
within such time as the State Bank may specify in this behalf, such information, documents or records 
in respect of any business carried on by such institution or Service Provider or other Authorized Party, 
as may be within its knowledge or under its possession, custody or control. 
(2) If such institution or Service Provider or other Authorized party fails or omits to furnish 
any information required by the State Bank under sub­section (1) or wilfully makes a statement which 
is false in any material particular it shall be liable to get its license under section 24 withdrawn by the 
State Bank and to pay it fine which may extend to one million rupees. 
(3) Any party or person aggrieved by an order passed under sub­section (2) may appeal 
within fifteen days of such order to the Governor of the State Bank, who shall dispose of the appeal 
within sixty days. 
70. Secrecy and Privacy.— (1) A Financial Institution or any other Authorized party shall, 
except as otherwise required by law, not divulge any information relating to an Electronic Fund 
Transfer, affairs or account of its consumer, except in circumstances in which, according to the practice 
and usage customary among bankers, it is necessary or appropriate for a Financial Institution to divulge 
such information; or the consumer has given consent therefor. 
 
Page 25 of 25 
 
(2) No person ot her than an officer or agent appointed by the Financial Insti tution that 
Maintains the account of a consumer may have access through in Electronic Terminal to information 
relating to Electronic Fund Transfer, the affairs, or the account of the consumer. 
(3) The rules governing the operation of individual accounts wi ll be applicable to 
Electronic Fund Transfers in relation to disclosure of information to third parties. 
71. Complaint Resolution. — (1) A consumer, not satisfied with the outcome of a 
complaint made to a Financial Institution in relation to any Electronic Fund Transfer or disclosure 
made by a Financial Institution to a third party, without prejudice to any right to seek any other remedy 
under the law, may make a complaint to the State Bank. 
(2) The State Bank after hearing the parties may pass such order as  it deems fit under the 
circumstances of the case. 
72. Suspension of Operation .— (1) The Federal Government in consultation  with the 
State Bank may by a general order, for the time being suspend operation of any provision of this Act, 
and from the date of such order, such provision shall cease to apply. 
(2) When the order made under sub­section (1) is withdrawn by the Federal Government 
such suspension shall cease to operate with effect from the date specified by the Federal Government 
in this behalf. 
73. Immunity of the State Bank and its Employees, etc .— (1) No suit or other legal 
proceedings shall lie against the State Bank or any officer or employee thereof or any person acting 
under its direction: 
(i) for any act done in good faith, 
(a) in the performance, or intended performance, of any function or duty; or 
(b) in the exercise, or intended exercise, of any power. in the capacity of the 
State Bank as the designated Bank under this Act; or 
(ii) for any neglect or default in the performance or exercise in good faith of such 
function, duty or power. 
74. Penalties— (l) Any financial Institution or Service Provider, who wilfully fails to 
comply with any provision of this Act or rules, circulars, directions, orders or bye­laws issued under 
this Act or any provision thereof, shall be liable to pay fine to the State Bank which may, extend to 
one million rupees. 
(2) In case of failure to pay the fine, State Bank may suspend or revoke the license of the 
Service Provider or Financial institution concerned, as the case may be. 
(3) If any amount of fine under sub­section (1) remains unpaid, it may be recovered as 
arrears of land revenue.