E-Financial
How and Why Contract Staff Aid Bank Fraud
There are indications that the growing tendency among banks to give sensitive positions to contract staff is heightening the risk of lenders being hit by fraudsters, according to New Telegraph.
The finding showed that despite repeated warnings by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC), banks not only continue to hire contract staff, but have started assigning these employees to sensitive roles that were previously reserved for full time or permanent staff.
A well-placed source, which attributed the development to the need for banks to cut costs in the face of a tough economy and rising competition, blamed it for most of the fraud cases recently recorded in the industry.
Indeed, a “concerned” Head of Operations at a Lagos branch of one of the leading banks in the country, who asked not to be identified, revealed that contract staff were directly and indirectly involved in the two cases of fraud recorded at his branch in the past two months.
He said: “In the first incident, one of the contract staff at the branch was able to siphon about N40 million belonging to one of the big Pentecostal churches in the country, while in the second incident, another contract staff was suspected of providing information to fraudsters who succeeded in stealing N4 million from a customer’s account.”
According to the bank official, more contract workers, compared with their permanent staff counterparts, are perpetrating fraud because of their relative poor remuneration.
He argued that with more banks deploying contract staff to increasingly more sensitive positions in a bid to cut costs, the likelihood of these workers – given their meager salaries – succumbing to the temptation of getting involved in fraudulent acts also increases.
“Before now, contract staff were not assigned to Automated Teller Machine (ATM) watch duties. You will also hardly find them being told to perform customer service duties. But all that has changed. Furthermore, in the past, most banks usually set a maximum value of between N200,000 and N500,000 as the limit for risky transactions that a contract staff can undertake, but these days, this limit has been raised to N1 million.
“Yet these are people that are paid N60,000 compared with full time staff that earn between N120,000 and N200,000. Of course, it is not difficult to see why some of them (contract staff) will not be able to resist offers from fraudsters, especially in these hard times,” he stated.
This newspaper also gathered that following a significant increase in the number of fraud cases it was recording, a Tier 1 lender, a few months ago, disengaged many of its contract staff and hired fresh graduates.
It will be recalled that Mr. Dipo Fatokun, CBN Director, Banking and Payments System Department revealed last year that the apex bank had advised lenders to desist from giving sensitive banking roles to contract staff as they may not have a stake in the financial institution.
He said: “A temporary staff may not have a stake in the bank so to say. So, it is encouraged that if they have staff that are not permanent, they should not give them responsibilities or roles that will expose them to critical functions of a bank.
“If you are giving somebody an authority to approve transactions of high magnitude and he does not have a stake in your bank, then you are already exposing yourself. So, this been going on and I believe many banks understand the need to rely on their key staff for major duties. That is one of the reasons the fraud attempts have been rising, but the value lost declining.”
Similarly, in the past two years, the Managing Director and Chief Executive of the NDIC, Alhaji Umaru Ibrahim, had been repeatedly warning banks against the use of outsourced staff, pointing out that in 2015, over 75 per cent of fraud cases in the banking sector was traced to outsourced bank staff.
He revealed that bank examination reports indicated that the high incidence of fraud and forgeries in the banking system was linked to outsourced or contract staff.
The NDIC Chief Executive Officer also stated that in as much as regulators appreciated the necessity for banks to cut costs, it was incumbent on all stakeholders to fashion out capacity building and other strategies to motivate all employees to contribute positively rather than engaging in criminal acts that impact adversely on the entire banking system.
Interestingly, Ibrahim had told finance and business journalists in Ilorin in October 2015 that 64 per cent of fraudulent activities in the banking industry in 2014 were traced to temporary staff member of banks.
According to fraud statistics contained in the latest Nigerian Electronic Fraud Report, which was prepared by the Banking and Systems Payment Department of CBN, the banking industry recorded 31,736 fraud cases involving the sum of N16.5 billion between January 2014 and December 2016.
The study showed that the frauds were perpetrated through various payment channels such as Across the Counter, ATMs, cheques and electronic-commerce platforms. Others are Internet banking, mobile banking, Point-of-Sale and web transactions.
Sterling Bank has launched a ₦2 billion scholarship initiative to support Nigerian students in private universities. The program, Beyond Education, was unveiled on Democracy Day and aims to remove financial barriers to higher learning.
The bank will fully sponsor 600 students from across Nigeria’s 36 states and the FCT to study Technology, Finance, Sales, and Public Health at Miva University, founded by Sim Shagaya. The selection process is merit-based, with candidates nominated by themselves or others, and final selection determined through public voting open to Sterling account holders.
Sterling Bank’s CEO, Abubakar Suleiman, described the initiative as an investment in Nigeria’s future, aligning with the bank’s commitment to Health, Education, Agriculture, Renewable Energy, and Transportation. The bank has already deployed over half a trillion naira in financing across these sectors.
According to Obinna Ukachukwu, Growth Executive at Sterling Bank, the program is about creating opportunities beyond education. The bank is shifting from short-term philanthropy to long-term ecosystem development, with investments in digitized healthcare, school financing, agricultural cooperatives, solar energy, and transport systems.
“Nigeria’s progress requires action,” Suleiman said. “We are funding the future architects of the country—those who will build the businesses, institutions, and innovations needed for national prosperity.”
Nominations for the Beyond Education scholarships are now open at www.sterling.ng/FUTURE. The initiative sets a precedent for private-sector-driven education investment, where success is measured not just in profit, but in people empowered.
Federal Government of Nigeria has signed a Memorandum of Understanding (MoU) with Investonaire Academy to train 100,000 young Nigerians annually in forex trading, financial planning, and risk management.
The agreement, signed in Abuja, was announced by Omolara Esan, Director of Information and Public Relations at the Federal Ministry of Youth Development. According to her, the initiative is part of the government’s broader strategy to reduce youth unemployment and enhance financial inclusion.
At the signing ceremony, Minister of Youth Development, Comrade Ayodele Olawande, described the partnership as a milestone in the ministry’s efforts to equip young Nigerians with practical financial skills. He emphasized that the programme would foster critical thinking, improve digital literacy, and expand access to global economic opportunities.
Speaking on the collaboration, Dr. Enefola Odiba, International Programme Director at Investonaire Academy, highlighted the importance of empowering youth with relevant financial and digital skills. He described young people as essential drivers of innovation and national development.
The ministry assured that the programme would be implemented with transparency and measurable outcomes, ensuring that participants gain practical expertise in forex trading and financial planning.
The Federal Government has recently intensified efforts to boost skill development across various sectors. A separate plan aims to train 100,000 artisans nationwide, following the successful upskilling of 29,000 individuals in previous phases. This initiative seeks to professionalize vocational trades, eliminate quackery, and introduce licensing systems.
Additionally, technicians from specialized institutions will receive industry-standard training to strengthen Nigeria’s labor force and increase self-reliance in skilled professions.
Through these efforts, the government hopes to position Nigerian youth for economic success both locally and globally.
Nigeria Deposit Insurance Corporation (NDIC) has begun the final phase of liquidation for the defunct Premier Commercial Bank, initiating the payment of liquidation dividends to verified creditors, nearly 25 years after the bank’s closure.
Premier Commercial Bank had its operating license revoked by the Central Bank of Nigeria (CBN) on December 20, 2000, following findings of financial instability and regulatory non-compliance.
Since then, the NDIC has overseen the bank’s liquidation process under a winding-up order from the Federal High Court, which designated the corporation as the official liquidator.
In a public announcement, the NDIC invited all eligible creditors to visit any of its zonal offices between June 2 and June 27, 2025, to verify and claim their entitlements.
This move marks a critical milestone in the final settlement of claims related to the bank’s collapse.
To facilitate the verification process, creditors are required to present proof of deposit or shareholding, such as a passbook, chequebook, term deposit certificate, or bank statement.
Additionally, valid identification documents must be submitted, including a driver’s license, international passport, national identity card, NIN slip/card, voter’s card, or a formal identification letter from a traditional ruler or local government chairman.
The NDIC assured the public that the ongoing settlement is part of a broader effort to bring closure to longstanding claims resulting from Premier Commercial Bank’s liquidation. The process, according to the corporation, has been designed to ensure efficient disbursement to all verified stakeholders.
Premier Commercial Bank is one of 53 deposit money banks whose licenses were revoked by the CBN between 1994 and 2018 due to various violations and signs of financial distress.
These closures were followed by legal procedures appointing the NDIC to manage asset recoveries and creditor settlements.
By initiating this final phase of payment, the NDIC is reaffirming its commitment to financial system stability and depositor protection while calling on all affected individuals and institutions to complete verification processes promptly to receive their due compensation.
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