Fraud cases: Fidelity, Wema, Diamond banks under investigation

The Nigerian Deposit Insurance Corporation (NDIC) is currently investigating several banking fraud cases. These reported incidents are increasing and negatively affecting the banking system of Nigeria.

NDIC reports on banking malpractice in Nigeria.

According to the NDIC, the number of banking staff involved in fraudulent acts is increasing. Their number went from 231 in 2016 to 320 in 2017. Reported cases in 2016 amounted to 16,751, however, in 2017 the number rose to 26,132. These striking numbers resulted in the loss of N2.37 billion.

NDIC’s most recent off-site supervision show that monetary malpractice is rampant in Nigeria. The above mentioned figures were based on 286 responses from 26 banks. The NDIC blames the banks for not reporting the frauds on time. Mr. Mohammed Kudu Ibrahim, the Head of Communications and Public Affairs Unit of NDIC, stated that forgeries reported in 2017 are 56.30% higher than those committed in 2016.

These forgeries are noticed when the returns are inadequate to the number of transactions made by a certain bank. Most forms of monetary transactions are prone to fraud, whether be it online transactions or ATM withdrawals.

The report made by the NDIC also mentioned instances of fraudulent conversion of cheques and cash suppression. It also clarified the fact that most of the abuse taking place is internal since the fraudsters are mainly bank staff.

Investigating fraud cases

“The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks for the inadequate rendition of returns to the Corporation,” clarified Mr. Ibrahim.

The Nigerian insurance will be following Sections 35 and 36 of its Act No 16 – amended in 2006- in its investigation. These sections impose on all Deposit Money Banks (DBMs) to send monthly updates to the NDIC on returns and possible cases of forgeries.

However, most of the targeted banks fail to send these monthly documents. Only four banks shared monthly reports with NDIC whereas the remaining 22 made no returns.

The current insurance covers are insufficient, this why the corporation is advising the banks to adopt new and more efficient security measures since the current system is proving to be inconsistent. Online fraud accounts to 24,266 or 92.68% of all the reported cases, which means that the needed security measures should revolve around Cybersecurity.

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