State Bank of Pakistan (SBP) has directed banks to immediately stop the practice of crediting multiple Income Tax Refund Orders belonging to different beneficiaries to a single account.
SBP has said that it has come to the notice that some of the banks are committing irregularities while lodging Income Tax/Sales Tax Refund Orders (issued by Tax Department) for payment to their beneficiaries.
For instance, a single customer's account is being used for lodging multiple Income Tax Refund Orders belonging to different beneficiaries despite the fact that Income Tax Refund Orders are non-negotiable instrument and are payable only to the payee on proper identification or to the payee's banker on certification that the amount will be placed to the payee's credit on realisation.
Keeping in view the above complaint SBP has instructed banks to immediately stop the practice of crediting multiple Income Tax Refund Orders (being a non-negotiable instrument) belonging to different beneficiaries to a single account.
Banks are also advised to make proper procedure to ensure payment of Income Tax/Sales Tax Refund Order only to its beneficiary. SBP has said that banks are advised to strictly comply with the above instructions, failing which punitive action shall be taken by SBP under provisions of Banking Companies Ordinance.