Ten Deposit Money Banks accounted for about 87.63 per cent of fraud and forgeries that occurred in the banking sector in the 2017 fiscal period.
According to the 2017 annual report of the banking sector prepared by the Nigeria Deposit Insurance Corporation (NDIC), out of the total amount of N12.01 billion fraud which the banking sector recorded in 2017, the ten banks accounted for N10.53 billion.
The report, however, did not reveal the identities of these banks.
“The number of fraud cases and the amount involved remained historically high while efforts were being made to stem the tide through adequate supervisory foresight and interventions by the authorities, as well as an initiative by the respective bank management to broaden the depth of internal control processes.”
The NDIC report also revealed that fraud incidences perpetrated through Automated Teller Machine platform and other card related channels had the highest frequency and actual loss sustained by banks in 2017.
“Fraud incidences perpetrated using ATM platform and other card related channels had the highest frequency and actual loss sustained by insured DMBs in 2017. The frequency and actual loss recorded in ATM/Card-related channels were 16,397 and ₦0.798 billion. That was higher than ₦0.504 billion and ₦0.476 billion in 2015 and 2016, with respective frequencies of 8,039 and 11,244 cases.”
This was followed by web-based fraud and fraudulent transfers/withdrawal of deposits with 7,869 and 963 attempts, respectively. The actual loss recorded through these channels, according to the report, stood at N0.71 billion and N0.32 billion in 2017.
Staff related frauds and forgeries
In 2017, 320 cases of fraud and forgery were staff-related, representing 1.22% of the entire frauds cases. This represents an increase of 38.5% from 231 cases reported in 2016 but declined by 31.2% and 24.7% from 425 and 465 cases recorded in 2014 and 2015, respectively.
A breakdown shows Officers and Executive Assistants, as well as Managers, accounted for 25.9% and 21.3% of the total fraud cases during the year. While Messengers, Drivers, Cleaners, Security Guards constituted 4.1% of the total fraud cases.
This has further reinforced the need to harden the entire internal control processes by Deposit Money Banks Management to help identify potential weaknesses by employing adequate checks and balances to protect the institution.