Post Views: 168 The Nigeria Deposit Insurance Corporation (NDIC) says it is set to investigate some banks for under reporting cases of fraud, forgerie...
The Nigeria Deposit Insurance Corporation (NDIC) says it is set to investigate some banks for under reporting cases of fraud, forgeries, and cases involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.
This decision, the corporation said, followed a report from its most recent Off-Site Supervision of the nation’s deposit money banks which showed that cases of abuses by their staff increased from by 38.53% from 231 in 2016 to 320 in 2017 above the figure reported for previous year.
In a statement by Mohammed Kudu Ibrahim, its head of communications and public affairs, said the inquiry is hinged on provisions of Section 35 and 36 of the NDIC Act No. 16 of 2006 (as amended), which requires all Deposit Money Banks (DMBs) to submit monthly information/returns on fraud and forgeries to the Corporation.
He noted that the corporation investigation followed the outcome of an off-supervision report wherein a total of 286 responses were received from 26 banks during the period, with 22 reporting nil monthly responses on fraud as at December 31, 2017.
A breakdown showed that the 22 commercial banks and four merchant banks rendered 286 Returns from staff who were dismissed, or had their appointments terminated for 26,182 cases of fraud and forgeries during the year under review, 320 of which were attributable to internal collaboration by bank staff. This represented 38.53% increase over the 231 reported in 2016, while losses arising from the reported cases fell by 11.43% from ₦760m in 2016 to ₦682m in 2017.
Also, response received from the banks was 56.3% higher than the 16,751 cases reported in 2016, just as the amount involved increased from ₦8.68bn in 2016 to ₦12.01bn, representing an increase of ₦3.33bn or 38%.
Expected, or actual loss however decreased slightly by ₦24.42 million or 1.03% from ₦2.39bn in 2016 to ₦2.37bn in 2017, just as internet/online-banking and ATM/Card-related fraud-types constituted 24,266 or 92.68% of all the reported cases, resulting in ₦1.51bn or 63.66% of losses in the Industry in 2017.
The report, Ibrahim continued, “also documented other miscellaneous crimes such as fraudulent transfers/withdrawals, cash suppression, unauthorized credits, fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, presentation of forged or stolen-cheques among others.
The corporation attributed 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.
The Fidelity Insurance Cover taken by banks to address fraud perpetrated by staff, notwithstanding, the NDIC noted the need for them “to further enhance their internal control and security measures, as the rising trend of e-Channels (Online banking & Card-related) fraud and forgeries in the Industry remains a serious cause for concern to the Corporation.”