In Nigeria: Banks record 26,182 fraud, forgery cases worth N12bn
Nigeria Deposit Insurance Corporation (NDIC) has outlined the number of fraud and forgeries in banking sector in 2017 which numbered 26,182 cases, translating to total sum of N12.01 billion, higher from N8.68 billion reported in 2016.
Also, a total of 320 bank employees had their appointments either terminated or were summarily dismissed in 2017 for fraud-related cases. The corporation confirmed the figures yesterday in a statement by Head, Communications and Public Affairs, Mohammed Kudu Ibrahim.
The NDIC has vowed to probe the Deposit Money Banks (DMBs) who fail to make fraud rendition return to the corporation “on instances of fraud, forgeries, and cases involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.” According to NDIC, banks’ expected/actual loss slightly decreased by N24.42 million or 1.03% from N2.39 billion in 2016 to N2.37 billion in 2017, internet/online-banking and ATM/Card-related fraud-types reported constituted 24,266 or 92.68% of all the reported cases, resulting in N1.51 billion or 63.66% of losses in the industry in 2017.
The report relied on 286 responses received from 26 banks during the period. It said there were 22 NIL monthly responses from the banks as at year ended December 31, 2017. The unravelling of fraud related cases in banks, NDIC explained, came to light from recent Off-Site Supervision of the DMBs which revealed the number of fraud cases attributed to internal abuse by staff of banks increased from 231 in 2016, to 320 in 2017, or 38.53% above the figure reported for the previous year.
Consequently, the corporation said it will investigate some banks for the inadequate rendition of returns to it on instances of fraud, forgeries, and cases involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities. “Section 35 and 36 of the NDIC Act No. 16 of 2006 (as amended) requires all Deposit Money Banks (DMBs) to submit monthly information/ returns on fraud and forgeries to the Corporation,” it added.
The report also documented other miscellaneous crimes such as fraudulent transfers/ withdrawals, cash suppression, unauthorized credits, fraudulent conversion of cheques, di-version of customer deposits, diversion of bank charges, presentation of forged or stolen-cheques, among others.
The 22 licensed commercial banks and four merchant banks rendered 286 Returns on Dismissed/Terminated staff as a result of fraud and forgeries during the year under review. Out of the 26,182 fraud cases reported by the 26 licensed banks, 320 cases were attributable to internal collaboration by bank staff. The report stated that 320 bank employees were sacked in 2017, as against 231 in 2016. That represented an increase of 38.53% in the total number of fraud cases reported in 2017.
However, the losses arising from the reported cases decreased from N760 million in 2016 to N682 million or about 11.43% in 2017. The corporation attributes the improvement to additional internal control measures adopted by the banks in the wake of the proactive corrective measures taken to ensure their compliance with good corporate governance principles.
“Despite the Fidelity Insurance Cover taken by banks to address fraud perpetrated by staff, there is still need for the banks to further enhance their internal control and security measures, as the rising trend of E-Channels (online banking & cardrelated) fraud and forgeries in the industry remains a serious cause for concern to the corporation,” NDIC stressed.