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Bank Insiders Help Fraudsters Steal Billions

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Despite multiple security checks in banks, incidents of fraud are on the increase, prompting the Central Bank of Nigeria (CBN) to raise alarm, blaming it on insiders.

A report by Weekly Trust takes a look at the disturbing trend.

According to Weekly Trust, since e-banking commenced some years ago, banking operations and services to customers have been made easier.

But despite the smoothness and comfort on offer, there are also setbacks and risks the banks and customers face from time to time. Investigations indicate a rise in fraudsters cashing in on modern technology to fleece unsuspecting depositors.

Weekly Trust spoke to a banker in one of the leading commercial banks in Nigeria, who craved anonymity, and he confirmed the rise of insider collaborators in fraud. He noted that the network of criminals is so strong that it is extremely difficult to pin down the culprits.

The source said the most elementary aspect of the fraud is wilful neglect of checking and confirmation of personal data and addresses of fresh bank customers who want to open new accounts.

 “There is a policy called “Know Your Customer” (KYC). It is expected that any person who comes to open a new bank account is only granted that opportunity upon confirmation by his account officer the accuracy of the information he has rendered in his personal data form, especially his office and residential address.  But in most cases, customers who are fraudsters who come to open accounts and have connivers within, give fake information,” he said.

“Without necessary confirmation, the conniver goes ahead to open such accounts, which are used in defrauding people. In effect, when fraud happens, the suspects cannot be located with the addresses in personal data forms. He stands a better chance of evading prosecution at this point,” the source added.

Another source disclosed that would-be fraudsters who have insiders approach the bank with account numbers and other details of persons they know are flush with cash.

“They come and pretend that they have forgotten the signature they signed for the account in question. They request that the manifest be opened for them to see their signature and remember. Once the insider opens the manifest, the fraudster could also request to snap the signature with his phone, under the pretext that he doesn’t want to forget it again. These are questionable demands, but the insider grants it because they are in collaboration. Of course, we know there are expert forgers,” he explained.

In another case, a man who operated an account with a commercial bank (name withheld) with a heavy base in the North had N2.1 million withdrawn from his account by fraudsters.

The man, who pleaded anonymity, said he had N3.2 million in his account and went to withdraw N200,000.

He had not withdrawn cash for a while, noting that the transaction was done. But since his GSM number which receives SMS alerts was inoperative, he requested for written balance, only to discover that N2.1 million had been withdrawn.

“I raised alarm and upon investigation by the management of the bank, it was discovered that someone forged my bank documents, impersonated me with an identity card and also cloned my GSM line. The money was transferred into an account in Abuja, but I couldn’t get the alert. The bank later discovered I never made the transfer or withdrawals and refunded my money, but it suspended the cashier who authorized the payment,” the victim said.

Weekly Trust gathered that fraud within the banking sector manifests at different levels and it is systemic in nature.

A source said bank staff would not ordinarily open doors for a thief to come in and steal money from the vault.

He said what obtains is that corrupt bank staff carefully arrange for a lapse to occur, so they can explore that window.

Also, a recently retired senior manager with one of the old generation banks who prefers to be identified simply as Mustapha said experience tells him it is almost impossible to hit any bank without internal assistance.

“One of the common examples of fraud amongst the top officers of banks is in approving fraudulent loans for their proxies. They register companies in the name of their friends or families, put documents together and approve huge sums to these companies which largely exist only on paper.”

Then they go ahead to approve all manner of concessions and waivers, practically giving themselves these monies, robbing the bank of legitimate income. Billions of naira get stolen this way, accumulatively.

Investigation also revealed that even where these companies truly exist with verifiable business on ground, they cannot access bank loans on record time without reaching a compromise with the bank officials on what percentage they will get as kick-backs.

“In doing so, even where there are danger signals to warrant reconsideration, they will be overlooked and approval will be given,” another source added.

A chartered accountant and auditor, Mr. Sunday Enenche said a good number of the high-profile fraud cases are executed by top management staff of banks, with bank management using their branches to warehouse large sums for politicians and other highly placed individuals in the society.

According to him, these monies are not captured in the books of the banks because they could raise suspicion by the Economic and Financial Crimes Commission (EFCC), saying it denies the bank of income.

“With the cooperation and understanding of the bank management, they move these sums around from time to time to avoid Central Bank of Nigeria’s (CBN) unscheduled inspection. You will rarely see the real owners of these monies in the banking hall, as they have their agents who are well-known by the banks and can access these monies at any time of the day,” he added.

Worried by the increasing cases of fraud, the CBN on January 19 through a circular issued a directive urging banks to take steps to curb the trend.

The directive, signed by Mr. Dipo Fatokun, Director, Banking and Payment System Department, also stated that the abuses center on identity theft and abuse of authorization.

The apex bank therefore announced measures to check such and gave a December 31, 2015 time limit for compliance by all banks or a N50,000 fine daily after the expiration of the deadline.

Experts argue that what you get with the lower ranks of bank officials is not frequent and they also come in various forms because the opening is not always there.

They insist that in some cases, double deductions occur on same amount on an account where the customer has made same type of deductions, by not crediting the customer’s account with deposits, yet issuing a teller to the customer.

They could also connive with robbers to hit the banks premises or bullion vans if they notice that guards are loose on certain days or times. There are also cases of signature forgery and altered cheques.

But Mustapha cautioned that whereas banks keep updating their fraud counter-mechanisms, a lot more depend on the integrity and prudence of the staff to succeed.

The banks may need to also reconsider the current practice of contract workers who handle transactions far above their pay grades.

“You cannot employ a graduate, place him on contract and pay him less than 50 percent of what a similar graduate in the same system earns, who is not on contract. Temptation will be there.”


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E-Financial

Edun, Finance Minister Inaugurates NDIC New Management

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Mr Wale Edun, minister of Finance and coordinating minister of the Economy,  has inaugurated Mr Thompson Oludare Sunday, new managing director/chief executive officer of the Nigeria Deposit Insurance Corporation (NDIC), and Dr Kabir Sabo Katata, executive director (Operations),  at the Ministry of Finance, Abuja.

Mr Wale Edun, minister of Finance and coordinating minister of the Economy, flanked by Mr Thompson Oludare Sunday, new managing director/chief executive officer of the Nigeria Deposit Insurance Corporation (NDIC), and Dr Kabir Sabo Katata, executive director (Operations),

In his speech during the occasion, the Minister submitted that the NDIC, as a component of the financial safety-net has a crucial role to play in the nation’s march to economic stability and prosperity.

He therefore charged the Management team to bring their diverse wealth of experience to bear on their new assignment while assuring them of the ministry’s full support in the task ahead.

Responding, Mr Sunday who spoke on behalf of the Management team, expressed appreciation to His Excellency, President Bola Ahmed Tinubu for their appointment.

He assured the Hon Minister of the readiness of the Management under his leadership to live up to expectations of the President in particular and the nation in general in the discharge of their duties.

The Management  later received by the Corporation’s Head Office with a warm welcome by the workforce.

A statement signed by Hawwau Gambo, head, Communication & Public Affairs Department, revealed that Addressing the workers on behalf the Management team, Mr. Sunday promised to work in harmony with the staff to move the Corporation to its next level performance.

He stressed that the Management’s focus would be based on the public policy objectives, functions and mandate devolved on the Corporation by the enabling law that established it.

Thompson Oludare Sunday is a seasoned financial expert with over 30 years of regulatory and supervisory experience.

Having cut his teeth with the Central Bank of Nigeria (CBN) in 1989, he went ahead to acquire high-end knowledge in Central Banking, spending 24 unbroken years in banking supervision.

While his vast experience is in the regulation and supervision of licensed institutions, his deep expertise span corporate governance, risk management and compliance as veritable tool for ensuring the safety and soundness of institutions.

He is a highly analytical and cross functional team worker with strong interest in building individual and institutional capacity for transformation and excellence.

Thompson’s skills and experience were horned by several key responsibilities and special assignments he handled for the apex Bank before his retirement as a Director 2021.

Kabir Sabo Katata, ED (Operations),  is a quantitative energy strategist and computational finance expert with strong power trading and risk management experience.

He has over twenty-eight years’ experience in the design and management of technically innovative systems in multiple industries including telecommunications, IT, energy (petroleum & power), finance and government.

He is a specialist in sophisticated financial optimization, the application of modern statistical techniques and mathematics to energy, deposit insurance and banking sectors.

Dr. Katata joined the service of the Nigeria Deposit Insurance Corporation in 2012 as an Assistant Director in the Research, Policy and International Relations Department and rose to the pinnacle of his career as Director in January 2022, before his new appointment as Executive Director (Operations).

 

 


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Union Bank Rewards Customers with ₦5 Million Each in Save and Win Palli Promo Season 4 Grand Finale

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Union Bank of Nigeria has proudly concluded the fourth edition of its acclaimed Save and Win Palli Promo, awarding three fortunate customers a life-changing ₦5 million each at the grand finale. Since its inception, this transformative campaign has disbursed over ₦330 million in cash and gift prizes, touching the lives of more than 5,000 customers nationwide and elevating their financial prospects.

The grand prize winners, representing diverse regions across the country, emerged through transparent electronic draws supervised by regulatory authorities. The celebrated recipients, Alhaji Abubakar Sadiq Isah (Zaria Branch, North), Atilabor Seikemefa Friday (Sapele Branch, South-South), and Oluranti Ogunluyi (Ilaro Branch, South-West), received their prizes at The Stallion Plaza, Union Bank’s Head Office, Marina, Lagos, in the presence of other winners, and the Bank’s executive leadership led by Managing Director/CEO Yetunde Oni.

Vivian Imoh-Ita, Head of Retail and SME Business, reflected on the enduring impact of the campaign: “Over the past four years, the Save and Win Palli Promo has enriched the lives of thousands, providing crucial financial relief and rewarding diligent savers. We are unwavering in our commitment to empowering our customers so they may thrive and achieve their ambitions.”

Chief Brand and Marketing Officer, Olufunmilola Aluko, highlighted the Bank’s broader mission: “Union Bank is delighted by the ripple effect our targeted savings initiatives have created. We have seen a significant boost in savings culture, allowing customers to reach their financial goals, while our innovative promotions continue to cushion economic challenges and foster responsible financial habits.”

Kicking off in December 2024 and concluding in May 2025, the latest season saw over 3,000 customers rewarded with gifts and cash, including motorcycles, tricycles, fuel vouchers, and substantial cash prizes, with total giveaways exceeding ₦131 million.

To qualify, customers maintained a minimum balance of ₦10,000 and completed at least five transactions monthly. Monthly draw winners received ₦100,000, while quarterly draws featured exciting prizes such as motorcycles and tricycles.

As Season 4 draws to a close, Union Bank reaffirms its dedication to nurturing customer growth and extending robust financial support nationwide. Through continued innovation, the Bank remains steadfast in its mission to empower Nigerians and foster sustainable wealth for all.


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NIBBS: Banks Close 29.4m Accounts, Dormant Accounts Hit 33.39m

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Banks in Nigeria closed 29.4 million accounts as of March 2025, according to the latest report by the Nigerian Interbank Settlement System (NIBSS).

NIBBS: Banks Close 29.4m Accounts, Dormant Accounts Hit 33.39m

The figure represents a sharp year-on-year increase of 30.43 per cent from the 22.54 million closed accounts recorded in March 2024.

It also reflects a steady rise in account closures over recent months, with 33.29 million closed accounts reported in February 2025 and 29.43 million in January.

The report also revealed a significant increase in dormant accounts, which surged to 33.39 million in March 2025, up from 19.79 million in the same period in 2024, a 71.3 per cent rise in inactive accounts over the past year.

Despite the spike in closures and dormant accounts, the number of active bank accounts rose from 219.64 million in March 2024 to 320.05 million in March 2025, representing an increase of over 100 million, or 45.7 per cent.

NIBSS defines a dormant account as one that has seen no deposit, withdrawal, transfer, or point-of-sale transaction for a period of six months.

The surge in account closures and dormancy follows the Central Bank of Nigeria’s directive issued in December 2023, mandating commercial banks to restrict Tier-1 accounts not linked to a Bank Verification Number (BVN) and National Identification Number (NIN) by March 1, 2024.

In response to the directive, BVN enrolment increased from 61.6 million in April 2024 to 66.23 million by July 2025, as more Nigerians rushed to meet the CBN’s compliance deadline.

 

 


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