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‘Losses to banking fraud, forgeries record decline’


Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation, Umaru Ibrahim

The number and value of successful fraudulent activities in the banking industry declined in 2016, compared to the records of 2015, the Nigerian Deposit Insurance Corporation (NDIC) has said.

The NDIC Managing Director/Chief Executive Officer, Umaru Ibrahim, made this disclosure while delivering a lecture: “The Role of NDIC in Mitigating Corruption in the Nigerian Banks,” at the general meeting of the Abuja Chapter of the Alumni Association of the National Institute (AANI).

Ibrahim, who was represented by a Deputy Director, Research, Policy and International Relations Department, Hashim I. Ahmad, said the reported cases of frauds, forgeries and outright theft involving bank staff recorded a huge decline of 48.12 per cent from N18.02 billion in 2015 to N8.68 billion in 2016.

However, he expressed worries over the rising trend of non-performing loans (NPLs) in banks, and said the NDIC had recommended the prohibition of directors of licensed banks, including microfinance banks (MFBs), and primary mortgage banks (PMBs) from obtaining credit facilities from their respective banks.

He pointed out that the NDIC collaborated with other stakeholders such as the Economic and Financial Crimes Commission (EFCC), Police Special Fraud Unit, and the Financial Malpractices Investigation Unit, to conduct investigations into banking malpractices.

He said the actual losses to the nation’s banking industry dropped by 24.29 per cent from N3.17 billion in 2015 to N2.40 billion in 2016, while the level of attempted cases of frauds and forgeries declined by N0.329 billion or 11.94 per cent from N2.756 billion in March 2017 to N2.427 billion in June 2017.

The NDIC boss also said although reported cases of fraud and forgeries rose by 36.42 per cent from 12,279 cases in 2015 to 16,751 cases in 2016. The reduction in the rate of successful fraud incidences and actual losses was an indication of improved regulatory/supervisory oversight, increased vigilance by banks, and the deployment of improved security architecture in the banking industry.

He attributed the factors breeding corruption in Nigerian banks to poor corporate governance, infractions in foreign exchange operations, cumbersome legal process, and lack of effective sanctions of offenders, amongst others.

Ibrahim reiterated that the NDIC, in conjunction with the Central Bank of Nigeria (CBN) will continuously supervise the banks to ensure their strict adherence to sound corporate governance practices.

He added that issues bordering on unethical financial practices, and the resolution of conflicts between customers and their banks were being addressed by the Bankers Committee.

He also said the NDIC provided capacity building programmes for the agencies in addition to seconding some NDIC staff to the institutions to assist them in investigating financial crimes.

He called for continued cooperation and collaboration between regulatory/supervisory authorities, the banks, the general public and the government in the fight against corruption in the banking industry.

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