Fraud perpetrated by bank staff on the rise, says NDIC

Nigeria Deposit Insurance Corporation (NDIC) says the number of fraud cases attributed to internal abuse by staff of banks increased from 231 in 2016 to 320 in 2017.

Mohammed Ibrahim, head, communications and public affairs of NDIC, said in a statement that the figure was in the organisation’s recent report on off-site supervision of the Deposit Money Banks (DMBs).

He said: “The report relied on a total of 286 responses received from 26 banks during the period and there were 22 NIL monthly responses from the banks as at year ended December 31, 2017.

“The 286 responses received from banks in 2017 cited 26,182 cases of fraud and forgeries which is 56.30 percent higher compared to 16,751 cases reported in 2016.

“Similarly, the amount involved in the fraudulent activities documented increased by N3.33 billion from the N8.68 billion reported in 2016 to N12.01 billion in 2017 or 38 percent.

“However, the expected/actual loss slightly-decreased by N24.42 million or 1.03 percent from N2.39 billion in 2016 to N2.37 billion in 2017.”

Ibrahim said internet/online-banking and ATM/card-related fraud-types reported constituted 24,266 or 92.68 percent of all the reported cases, resulting in N1.51 billion or 63.66 percent of losses in the industry in 2017.

He said the report also documented other miscellaneous crimes, such as fraudulent transfers/withdrawals, cash suppression, unauthorised credits and fraudulent conversion of cheques.

Others are diversion of customer deposits, diversion of bank charges and presentation of forged or stolen-cheques.

He said that 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.

Ibrahim said 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,” he said.

“That represented an increase of 38.53 percent 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 percent in 2017.”

Ibrahim said NDIC 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.