NDIC to Investigate Banks for Failure to Make Returns on Fraud Cases


Monday, March 12, 2018 /01:05 PM / NDIC 

The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks for the inadequate rendition of returns 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. 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.


The NDIC made the decision in the light of the most recent report from its 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. The report relied on a total of 286 responses received from 26 banks during the period. There were 22 NIL monthly responses from the banks as at year ended 31st December 2017.


The 286 responses received from banks in 2017 cited 26,182 cases of fraud and forgeries which is 56.30% higher compared to 16,751 cases reported in 2016. Similarly, the amount involved in the fraudulent activities documented increased by 3.33 billion from the 8.68 billion reported in 2016 to 12.01 billion in 2017 or 38%. However, the Expected/Actual loss slightly-decreased by 24.42 million or 1.03% from 2.39 billion in 2016 to 2.37 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 1.51 billion or 63.66% of losses in the Industry in 2017. The report 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 22 Licensed Commercial Banks and 4 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.


A total of 320 bank employees had their appointments either terminated or were summarily dismissed 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 760 million in 2016 to 682 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.


However, 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 & Card-related) fraud and forgeries in the Industry remains a serious cause for concern to the Corporation.

Mohammed Kudu Ibrahim

Head, Communication & Public Affairs

19th January 2018


Related News

1.       SEC Foils Penny Stock Executive’s Plan To Pump Stock And Exploit Investors

2.      Years After: Bank Customer Discovers N34m Was Withdrawn From His Account

3.      The Cost of Corruption in Nigeria ... and More Deaths Than We Should Have

4.      SEC Gives Approval For Deloitte To Commence Forensic Audit Of Oando Plc

5.      How To Evaluate Information Provided By A Whistleblower

6.      ASIC Takes Action Against Rio Tinto, Ex CEO and CFO For Misleading and Deceptive Conduct

7.      $21.4 Million Compensation Paid To Customers By Australia''s Five Largest Financial Services Inst.

8.     Deutsche Bank To Repay Misled Customers - Firm And Former Head Trader Settle SEC Charges

9.      Further UK Serious Fraud Office Charges In Barclays Qatar Capital Raising Case

10.  High Court orders bench warrant on Innoson CEO

11.   Switzerland, The U.S. Singled Out For Financial Secrecy By New Index

12.  Federal High Court Affirms Senate’s Authority to Choose Credible EFCC Chairman

13.  Seven Reasons To Pay Attention To USA Foreign Corrupt Practices Act Corporate Enforcement Policy


Related News