Connect with us

E-Financial

Fraudsters Overwhelm Banking Operations, Nigerians Cry Out

Published

on

Spread the love

Nigerians are worried that the activities of fraudsters in banks across the country may have overwhelmed banking operations despite efforts at curbing them.

 

Gen Yakubu Gowon, former Head of State, and chairman of the recent first extra ordinary fellowship investiture of the Charted Institute of Bankers of Nigeria (CIBN), called for urgent action by banks and government to stem the tide.

 

Gowon said the Nigerian banking and finance industry has in recent time been plagued with frauds and unethical practices.

 

“No day passes without reports of frauds and other unethical practices in the industry. This constitutes a big threat to the values of trust and professionalism which ought to be the basic principles of the banking industry. I am imploring the government, banks and security agencies to further beam their searchlights in the direction of fraudsters who make banking difficult”, Gowon said.

 

Over the years, technology has helped banks in the country improve efficiencies as they churn out one form of innovations or the other with huge contribution to bottom line.

 

However, just as banks are making money through technology, banks’ customers are daily losing billions of naira, no thanks to technological innovations and upgrade by fraudsters.

 

Daily Independent reported that latest developments have shown that technology, which has given banks so much leverage among themselves, seems not enough to curtail cases of internet fraud in the banking system.

 

The rising cases of bank fraud in Nigeria are assuming an alarming proportion and, in the process, causing genuine worries to policy makers and bank regulators.

 

There are indications that despite efforts by the authorities to curb the menace and clean up the system, the banking sector is still under heavy burden of fraud cases.

 

For instance, in the first six months of 2018, a report by the Central Bank of Nigeria (CBN), recorded 20,768 cases that gulped N19.77 billion were recorded, but the actual loss by banks under the same period was N12.06 billion.

 

According to the report, there were 20,768 reported cases of fraud and forgery (attempted and successful), valued at N19.77 billion in the review period, compared with 16,762 cases, involving N5.52 billion and $ 0.12 million in the corresponding period of 2017.

 

“The actual loss by banks to fraud and forgery, however, amounted to N12.06 billion, compared with the N0.78 billion and $0.03 million, suffered in the first half of 2017.

 

“The reported fraud and forgery incidences were perpetrated by both bank staff and non-bank culprits. The cases involved armed robbery attacks, fraudulent ATM withdrawals, draft defalcation, illegal funds transfer, pilfering of cash, stealing, suppression and conversion of customers’ deposits,” it added.

 

The report revealed that fraud and forgery incidences were perpetrated by both bank staff and non-bank people.

 

In the period under review, the actual loss by banks to fraud and forgery amounted to N12.06 billion, compared with the N0.78 billion and $0.03 million, suffered in the first half of 2017.

 

The report also shows that the number of fraud related cases increased by 4,006 compared to 16,762 cases involving N5.52 billion and $ 0.12 million in the corresponding period of 2017.

 

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

 

Mr. Mohammed Ibrahim, head, Communications and Public Affairs of NDIC, said the figure was in the organisation’s recent report on off-site supervision of the Deposit Money Banks.

 

“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 per cent 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 per cent.

 

Cybercrime experts blame the rising incidences of insider-related fraud cases in banks on poverty and weak internal control measures in banks.

 

They also accuse banks of inadequate rendition of returns on instances of fraud, forgeries, and cases involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.

 

Dr Victoria Enape, Pro-tem President, Chartered Institute of Forensic and Investigative Auditors of Nigeria (CIFIAN) said training had become necessary going by the global acknowledgment of corruption in most government and financial institution and its (corruption) rejection by the United Nation (UN), World Bank and International Monetary Fund (IMF).

 

“Government at all levels are losing billions of Naira every day and most of these criminal cases bordering on fraud, corruption and cyber-crimes are partly because there are no forensic and investigative auditors in Nigeria to prevent fraud from taking place.

 

“The place of training of forensic and investigative auditors cannot be over emphasised because the whole world has embraced this current trend years ago which has assisted them in the fight against fraud,” Enape said.

Nigeria CommunicationsWeek believes that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. So since 2007, we have devoted our energy to independent reportage of technology and how they affect lives.

Continue Reading
Advertisement
Comments

E-Financial

CBN Gives 3 New Banks Nod to Start Operations

Published

on

Godwin Emefiele, Governor of the Central Bank of Nigeria
Spread the love

Central Bank of Nigeria (CBN) has confirmed the licensing of three new banks by adding them under different lists published on its website.

 

The new operators are Titan Trust Bank Limited, TAJ Bank Limited and Globus Bank Limited.

 

Though Titan Trust Bank Limited and Globus Bank Limited started operations earlier, the addition to the list of  Deposit Money Banks (DMBs) and financial holding companies operating as on July 23, 2019, by the CBN has cleared every speculation.

 

The list also indicates that the regulator has issued a Non-Interest Banking license with regional authorisation to TAJ Bank Limited. While two of the newly licensed banks will operate as commercial lenders, the third one, TAJ Bank Limited was licensed to operate as a non-interest bank.

 

Before the banking reform of 2005, instituted by ex-governor of the CBN, Charles Soludo, Nigeria has as many as 89 banks operating as commercial and merchant banks. With the reform, which hiked minimum capital base to N25 billion from N2 billion, the number reduced to 24 universal banks.

 

However, subsequent alignment and take over by the regulators led to further consolidation in the operations of the banks, leading to a downward reduction in the number of operators.

 

The newly licensed TAJ Bank Limited has joined Jaiz Bank as only two operating as non-interest banks in the country.

 

Though details of the newly licensed lenders are still scanty, industry watchers revealed that Titan Trust Bank has as its Chairman, a former Deputy Governor of the Central Bank of Nigeria (CBN), Mr Tunde O. Lemo, and Mr Mudassir Amray as Managing Director and Chief Executive Officer (MD/CEO).

 

Titan trust bank was established in 2018 but officially obtained its license in April 2019 as a national bank and started operations. The Executive director is Adaeze Udensi. The bank’s operations include Small and medium-scale enterprises (SME) banking, Digital banking and Commercial banking

 

Also, Globus bank limited obtained its regional banking license in 2019 and begun operations on May 2, 2019.

 

Available records show that the executive director of Globus Bank Limited is Elias Igbinakenzua. Igbinakenzua has had stints as an Executive Director of Zenith Bank and Access Bank respectively

Continue Reading

E-Financial

NDIC Pays N593.8m to Shareholders of Banks In-liquidation

Published

on

Spread the love

Nigeria Deposit Insurance Corporation (NDIC) on Tuesday revealed that it paid the sum of N593.78 million to shareholders of some banks in-liquidation in 2018.

 

NDIC said this amount was paid to 48 shareholders of the affected lenders.

 

“The NDIC paid the sum of N593.78 million to 48 shareholders of Alpha Merchant Bank, Rims Merchant Bank and Continental Merchant Bank in 2018,” the report titled NDIC 2018 Annual Report.

 

It stated that the cumulative liquidation dividend paid amounted to N3.30 billion to 679 shareholders of six Deposit Money Banks (DMBs) in-liquidation as at December 31, 2018 against N2.71 billion paid to 631 shareholders of DMBs in-liquidation as at December 31, 2017.

 

“However, the total liquidation dividend declared for shareholders of DMBs-in-liquidation stood at N4.04 billion as at December 31, 2018,” the report added.

 

The NDIC further said in the report that during the year, it paid the sum of N1.52 billion to uninsured depositors of 20 DMBs in-liquidation.

 

In total, the agency said it has paid the sum of N100.39 billion as liquidation dividend to uninsured depositors of closed DMBs as at December 31, 2018.

 

The report stated that through sustained and diligent liquidation activities, the NDIC has realized assets to fully pay the deposits of the customers of 17 out of the 49 DMBs in-liquidation.

 

“In effect, all the depositors of the 17 defunct banks who came forward to file their claims have been paid all their monies (both insured and uninsured) that were erstwhile trapped in such banks,” it said.

 

On the asset management activities in the year under review, the NDIC said it ensured the efficient conversion of assets of closed financial institutions to cash for the payment of liquidation dividend to uninsured depositors, creditors and shareholders.

 

“Overall, the NDIC realised the sum of N777.03 million from the disposal of risk assets, physical assets and investments for the DMBs, MFBs and PMBs in-liquidation during the year ended December 31, 2018,” it added.

 

Commenting on the major challenges faced in asset management activities in 2018, the agency said they were majorly inadequate documentation of borrowers’ information by failed banks; unwilling attitude of high net-worth debtors of failed banks to liquidate their debts; preponderance of uncollateralised loans; problems associated with identifying assets of judgment debtors; protracted legal processes due to frequent adjournment of cases; large outstanding insider-related debts usually characterised by poor documentation and insider abuse; and difficulties to repay loans induced by economic realities, policy inconsistencies as well as issues relating to moral hazards.

 

Continue Reading

E-Financial

Ecobank Takes Over Shoreline Power Company over N4.6Bn Debt

Published

on

Spread the love

Taiwo Ogbara, a receiver-manager appointed by Ecobank Nigeria Limited, has been empowered by a Federal High Court sitting in Lagos to have unrestricted access to one of the debtors of the financial institution, Shoreline Power Company Limited, into its premises.

 

The power firm was said to owe the lender about N4.6 billion and that when the bank appointed a receiver to take over the company, it resisted, which prompted a court action and Justice Chuka Obiozor restrained the firm’s management, including Orikolade Karim, Tunde Karim, Yinka Karim, Marc Hasenclever and Graeme Stout, from interfering with or obstructing Mr Ogbara in the course of his duties as receiver-manager, pending the hearing and determination of the motion on notice.

 

According to reports, the judge granted an order of interim injunction restraining the defendants or their agents from tampering with or disposing of the firm’s assets and properties covered by a Deed of All Assets Debenture of March 18, 2013 between Ecobank and Shoreline Power Company, registered at the Corporate Affairs Commission (CAC).

 

In his ruling, Justice Obiozor directed the Inspector-General of Police (IGP) and his officers and men to assist the receiver-manager in carrying out his duties over the firm’s properties and equipment and further granted an order of interim mareva injunction restraining all Nigerian banks from accepting or honouring any mandate or cheques presented by the defendants for the withdrawal of any sum kept in Shoreline Power Company’s account, pending hearing of the motion on notice.

 

The banks were also directed to file the company’s statements of account with them within 48 hours and to transfer such funds into a receivership account as may be requested by the receiver-manager.

Continue Reading

Trending

Copyright © 2017 Communication Week Media Limited.