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Finance 08/10/2024 Central Bank introduces temporary measures to prevent fraudulent banking operations

Central Bank introduces temporary measures to prevent fraudulent banking operations

Tashkent, Uzbekistan (UzDaily.com) — In recent years, there has been an increase in cases of online loans being fraudulently obtained in the names of citizens through mobile applications of commercial banks, with perpetrators employing social engineering techniques and digital technologies. There have also been instances of illegal appropriation of loan funds transferred to bank cards via P2P transfers.

During the current year, 463 instances of online loans were fraudulently obtained in citizens’ names, resulting in financial losses amounting to approximately 15 billion soums.

To combat this type of fraud, the experiences of developed countries have been studied. For example, the European Union, Australia, and Russia have implemented a "cooling-off" period of 14 days, while the United States has a 3-day period and Canada has a 2-day period. This approach helps minimize the risks of fraud when applying for online loans.

In response, the Central Bank of Uzbekistan will introduce a temporary procedure from November 1, 2024, to April 1, 2025, aimed at preventing suspicious operations with bank cards when applying for online loans for individuals.

From now on, citizens are required to undergo biometric identification when applying for a loan through the bank’s mobile application. This requirement ensures that the application is submitted by the individual themselves and additionally confirms their identity.

According to the new procedure, after a loan application is submitted, the credit organization will conduct two checks (scoring) of the applicant’s credit history in the credit bureau databases: at the application stage and before disbursing the funds.

If the applicant has a poor credit history, high debt burden, or has taken out several loans within a short period, they may be denied the loan or offered a smaller amount.

This measure aims to prevent situations where multiple credit organizations issue loans in the name of a citizen who has become a victim of fraud.

Additionally, if a customer is obtaining an online loan for the first time or logs into the bank’s application from a new device, restrictions will be imposed for the first 48 hours after receiving the loan on P2P operations, transfers to individuals’ accounts, topping up electronic wallets, transferring funds abroad, mobile top-ups, and online currency exchanges.

To lift these restrictions, the customer must call the number indicated in the SMS within 48 hours and confirm that they obtained the loan without any fraudulent intervention. After that, a bank employee will verify the information provided and conduct further verification.

It should be noted that these restrictions do not apply to cashing out loan funds or using them to pay for goods and services.

If it is determined within 48 hours that the loan application was submitted under fraudulent influence or if the customer fails to pass the additional verification, the loan agreement will be terminated, and the funds disbursed will be returned to the bank.

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