THE GROWING CASES OF BANK FRAUD
The regulators should do more and restore sanity to banking operations
The Nigeria Deposit Insurance Corporation (NDIC) has disclosed that the total amount resulting from bank fraud and forgery cases stood at N120.79 billion in 2020. While the amount represented a decline of 40.98 per cent when compared with the N204.65 billion recorded in 2019, the number of fraud cases surged by 177.10 per cent to 146,183 in 2020 from 52,754 in 2019, according to the NDIC 2020 Annual Report. This surge in fraud particularly in digital and electronic payment systems is a growing concern in the financial system and should be dealt with by relevant authorities.
In perpetrating their internal abuse, unscrupulous bankers connive with outsiders to defraud unsuspecting customers by helping fraudsters to open fake accounts into which victims are deceived to make deposits. This is not only a clear expression of how the menace of corruption has permeated every sphere of our national life, but a situation where banks which ought to be the custodian of people’s trust have transformed into dens of robbers. In 2016, there were 16,751 reported cases of bank fraud and a year later, the number had increased to 26,182. And most of them were internet/online-banking and ATM/card-related fraud-cases.
What is particularly irksome is the level of negligence and carefree attitude by the management of the various banks involved. Ordinarily, especially in this age, every bank is expected to have a sound data base with effective platforms for tracing fraudsters. But such is the level of criminal negligence that some unscrupulous bank employees now open fraudulent accounts for their cronies within the system without being detected. With that, it becomes easy for criminals masquerading as bankers to provide information to their co-conspirators, leading to online/internet fraud.
Meanwhile, one of the platforms for fighting online fraud is bank verification number (BVN). But years after the expiration of the deadline given by Central Bank of Nigeria (CBN) to banks for the issuance of BVN, many accounts are yet not linked with any verification number. It should also be noted that the level of fraudulent cases and magnitude of losses in banks would ultimately exceed the discoveries of NDIC as the corporation’s findings were only predicated on reported official cases. The social media is replete with numerous reports by duped bank customers.
Against this backdrop, the magnitude of losses recorded by bank customers as reported by the NDIC should be a wake-up call to the Economic and Financial Crimes Commission (EFCC) to beam its searchlight into bank operations with a view to flushing out the criminal elements in the system. This is necessary for efforts by government to promote e-payment and entrench a robust cashless economy achieve optimal result.
If the federal government is indeed committed to fighting financial crimes, it must take decisive steps to end internal robbery in the banks by reading the riot act to them: to either clean up their systems or face severe sanctions. The government must also have the will to shut down any account that is not linked to BVN while giving innocent owners the platforms to apply through their banks for proper registration with view to reclaiming their funds and those with criminal records should be forfeited to the federal government.
To our collective shame, our country is often cited as a breeding ground for these nefarious practices because of the activities of some of our citizens who use their skills in perverse order to defraud individuals and companies. As regulators within the sector, the NDIC and CBN cannot just be expressing public lamentation about these sordid practices. It is their responsibility to restore sanity to banking operations in Nigeria.
