It has come to our 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 instruments 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 realization.

In view of the above, all banks are advised to,

1. Immediately stop the practice of crediting multiple Income Tax Refund Orders (being a non-negotiable instrument) belonging to different beneficiaries to a single account.

2. Make proper procedure to ensure payment of Income Tax/Sales Tax Refund Order to its beneficiary.

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.

Please acknowledge receipt.