Connect with us

E-Financial

Reps Mull N20m Per Day Fine on Banks for Insider Abuse

Published

on

Kindly share this post

Jones Onyereri, chairman of the house of representatives’ committee on banking and currency, has said that banks may pay as high as N20 million per day as fine for infractions like insider abuse.

 

Insider abuse includes the broader range of actions where an insider takes action or fails to take action; where the bank is harmed, takes on additional risk, or loses an opportunity; and where the insider or a related party somehow benefits because of his position.

 

Onyereri told the Cable, on the sidelines of the ongoing Spring meetings of the International Monetary Fund and World Bank Group, that the current volume of non-performing loans (NPLs) is “a worse grave situation”.

 

Central Bank of Nigeria (CBN) recently said that insider abuse in banks is a major cause of fraud in the banking industry.

 

Also in its recently released World Economic Outlook, the IMF expressed concerns about deteriorating loan quality in Nigeria saying it could affect the “the ability of the banking sector to support growth in these countries and raise the risk of costly recapitalization.”

 

“That’s why the government introduced AMCON. I think that we are in a worse grave situation, that’s the honest truth because the non-performing loan is far beyond the usual industry threshold and for me it is embarrassing,” the lawmaker said.

“That’s why we have touted the idea that we won’t allow AMCON too. If you look at what we are doing especially in the house of representatives, we are mending the BOFIA act to curb as much is within reasonable limits the whole idea of non-performing loans. The core of non-performing loans is insider abuse.

 

“They give themselves loans far in excess of the accepted value. What we have at present in the BOFIA is a situation where if there is any infraction, they pay as little as N100,000 or N1000 and any bank can afford that if they have to pay N1000; it means nothing to them.

 

“Now we have increased it to the extent that thinking about committing such infractions will be scary to anybody that intends to do so. If you know that you need to pay as much as N20 million a day for every day that you continue to have that infraction, you won’t dare do any of those things.”

 

Onyereri said it is “absolute irresponsibility to have a banking supervision department” and still have a huge volume of NPLs.

 

“The second one which must be sounded very loud and clear is that it is absolute irresponsibility to have a banking supervision department and you still have huge volumes of non-performing loans because every day you are supposed to have on the site and offsite inspection of the bank books so why are they not doing that?

 

“You will see it clearly that this loan is not backed by any collateral or didn’t follow due process so why would you approve it? And even if you do because along the line businesses can get bad, but if you monitor adequately, you’ll be able to curb this before it gets so bad.

 

“That’s why it’s also good for us to strengthen NDIC so that a joint supervision with the CBN will guarantee that we reduce this non-performing loans.”

 

The lawmaker said the report will be released soon and the amendment will be signed into law.


Kindly share this post

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.

E-Financial

Diaspora Remittances to Nigeria Reach $4.22 Billion in 2024, Says CBN

Published

on

Kindly share this post

Central Bank of Nigeria (CBN) has announced that diaspora remittances through international money transfer operators (IMTOs) reached $4.22 billion between January and October 2024.

This figure represents a 61 percent increase, or $2.62 billion more than the amount recorded during the same period in 2023.

CBN Governor Olayemi Cardoso shared the figures during an interactive session with the Senate Committee on Banking, Insurance, and Other Financial Institutions at the National Assembly on Wednesday. “The year-on-year increase reflects significant growth,” Cardoso noted.

He also reported that remittances rose from $336 million in September 2024 to $402 million in October 2024 on a month-to-month basis.

Cardoso expressed optimism about continued growth in remittance inflows, saying, “The remittance inflows would continue to rise by the end of the year, given the current trajectory.”

He attributed the surge to improved efficiency in the remittance system, the positive effects of President Bola Tinubu’s policies, and increased trust among Nigerians in the diaspora to contribute to national development.

In addition to remittance updates, Cardoso addressed the state of Nigeria’s external reserves, which he said had grown to $42.01 billion as of December 12, 2024, from $38.35 billion on September 30, 2024.

“External reserves rose largely due to receipts from crude oil-related taxes and third-party receipts in Q3 2024,” he explained.

He added that Nigeria’s external reserves could fund over nine months of goods and services imports, surpassing the international benchmark of three months. “Our external reserves level is a robust buffer against shocks,” Cardoso said.

On the issue of cash shortages, the CBN governor reiterated the enforcement of the new policy imposing a fine of N150 million on any bank branch found distributing new naira notes illegally to currency hawkers.

Cardoso also shared his outlook for the Nigerian economy in 2025. “Distinguished Senators, as we conclude this briefing, I want to highlight that despite the challenges facing our economy, there are clear reasons for optimism,” he said.

“The gradual stabilisation of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”

This comes as the CBN continues to implement measures to strengthen the economy. On October 17, the apex bank reported that remittance inflows had risen to almost $600 million by the end of September, while on June 25, it granted eligible IMTOs access to trade on the official FX window.

 


Kindly share this post
Continue Reading

E-Financial

Fraud in Bank Branches Surges by 31 Percent in Q2 — FITC

Published

on

Kindly share this post

The Nigerian banking sector has witnessed a concerning rise in fraudulent activities, with incidents of fraud in bank branches increasing by 31 percent in the second quarter of 2024.

Fraud in Bank Branches Surges by 31 Percent in Q2 — FITC

This alarming statistic was disclosed by the Financial Institutions Training Centre (FITC) in its Fraud and Forgeries report, highlighting significant challenges to the integrity of the country’s financial system.

Fraudulent activities in Nigerian banks led to a staggering N42.33 billion in reported losses during the first half of 2024.

This sharp rise was driven by escalating fraud across multiple channels, most notably within physical bank branches.

The FITC report revealed that fraud in bank branches rose dramatically to N42.2 billion in the second quarter, compared to N133.9 million in the first quarter.

The FITC data also pointed to a massive 1,560.3 percent increase in computer and web fraud. Losses in this category surged from N24 million in the first quarter to N400.8 million in the second quarter.

In contrast, mobile fraud witnessed a significant decline, dropping by 59 percent from N216.4 million in the first quarter to N88.7 million in the second quarter.

Interestingly, no cases of ATM-related fraud were recorded during the period under review.

The figures also indicate a shift in fraudulent activities involving various financial instruments. Card fraud saw a notable decline of 47.66 percent, with cases dropping from 21,469 in the first quarter to 11,231 in the second quarter. Conversely, cheque-related fraud rose by 36.67 percent, increasing from 30 cases in the first quarter to 41 in the second quarter.

Mobile fraud recorded an even steeper decline in value terms, dropping by 99 percent from N21.6 billion in the first quarter to N216.36 million in the second quarter.

These figures suggest evolving strategies among fraudsters, with some methods becoming less prevalent while others gain traction.

Amid the rising tide of fraud, legal actions have also intensified. In one notable case, an Abuja Federal High Court issued a 30-day freeze on 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank.

The court’s directive, issued on October 15, 2024, was based on a motion filed by the police against James Akagwu Isaac and other suspects, including several financial institutions.

Analysts say the surge in fraudulent activities underscores the urgent need for heightened vigilance, enhanced security measures, and robust regulatory interventions in Nigeria’s banking sector.

While the decline in some fraud categories, such as mobile and card fraud, offers a glimmer of hope, the sharp rise in branch-based and web-related fraud highlights the evolving tactics of fraudsters.

To combat these threats effectively, experts recommend that banks must invest in advanced fraud detection systems, conduct regular staff training, and strengthen internal controls.

Collaboration between financial institutions, law enforcement agencies, and regulators will also be crucial in mitigating the impact of fraud and safeguarding the financial ecosystem.

The FITC report serves as a stark reminder of the vulnerabilities within the banking sector and the need for proactive measures to address them. Without sustained efforts, the rising trend of fraud could pose significant risks to Nigeria’s economic stability and the trust of consumers in the financial system.

 

 

Credit: Tribune


Kindly share this post
Continue Reading

E-Financial

UBA to Deepen International Expansion, Others with N239bn Rights Issue

Published

on

Kindly share this post

United Bank for Africa (UBA) Plc said it will utilise the net proceeds of its ongoing N239.4 billion rights issue to invest in additional digital technologies and business expansions that will strengthen the bank’s seven and half decades of impressive performance.

UBA to Deepen International Expansion, Others with N239bn Rights Issue

Tony Elumelu, group chairman, UBA,

UBA is offering 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share. The rights issue is pre-allotted on the basis of one new ordinary share of 50 kobo each to every five ordinary shares held as at November 05, 2024.

The rights issue is scheduled to close on December 24, 2024.

Tony Elumelu, group chairman, UBA, said the primary objective of the ongoing rights issue is to strengthen the bank’s position as a pan-African banking industry leader and a highly rewarding institution for all stakeholders.

He said the group decided on the rights issue to ensure that shareholders continue to derive undiluted benefits from a stronger, more innovative and resilient pan-African banking group.

Elumelu said the rights issue would enable the bank to drive organic expansion and business growth within and outside Nigeria, while strengthening its international operations, adding that UBA recently signed an agreement to commence full banking operations in France.

According to him, with presence in key global financial hubs including the United Kingdom (UK), United States of America (USA), France and United Arab Emirates (UAE), the bank would deepen its global operations by investing more in these global markets and further extend its global reach.

He noted that, “With African subsidiaries contributing more than 50 per cent of the group’s overall performance, the bank would also make additional investments in existing African operations while exploring new opportunities. UBA currently has operations in 19 African countries outside of Nigeria.”

He pointed out that the bank’s expansion plan is driven by its philosophy of developing African businesses, noting that UBA is not only expanding its geographical reach, but also playing a strategic and pivotal role in the economic transformation of Africa as a continent.

He added that while the rights issue would enable the bank to meet the new capital requirements stipulated by the Central Bank of Nigeria (CBN), the net proceeds would put the bank in a better stead to expand lending to small and medium enterprises (SMEs).

He outlined that the bank would make substantial additional investments in technologies to consolidate its reputation as a cutting-edge financial services group and deliver a more robust customer experience.

To him, new investments in information and communication technology (ICT) would further strengthen the group’s digitisation and operational efficiency, thus fostering improving coordination and synchronisation amongst the various entities and delivering improved service delivery and customer satisfaction.

UBA said it plans to strengthen collaboration and partnership with TELCOs and FinTechs to drive technology-enabled initiatives across Africa that will improve intra-trade, remittances, and payments across Africa.

The bank added that it plans to broaden its payment capabilities to enable it to transform the way merchants collect payments by offering solutions that offer seamless, secure and user-friendly ways of managing and consummating transactions.

Elumelu reiterated the bank’s long-term strategy of becoming the undisputed leading and dominant financial services institution in Africa, with greater emphasis on Nigeria.

 

 


Kindly share this post
Continue Reading

Trending