NDIC To Investigate Banks Over Fraud

Channels Television  
Updated March 11, 2018

NDIC, Customer protection

 

 

The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks over fraud related cases in their transactions.

A statement from NDIC’s HEAD, Communications and Public Affairs, Mohammed Ibrahim, said the move was in line with Section 35 and 36 of the NDIC Act No. 16 of 2006 for all Deposit Money Banks (DMBs) to submit monthly information/returns on fraud and forgeries to the Corporation.

“The Nigeria Deposit Insurance Corporation (NDIC) is to investigate some banks for the inadequate rendition of returns to the Corporation,” Ibrahim said on Sunday.

The commission is faulting banks for their failure to deliver 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.

“Section 35 and 36 of the NDIC Act No. 16 of 2006 (as amended) requires all Deposit Money Banks (DMBs) to submit monthly information/returns on fraud and forgeries to the Corporation,” the statement read in part.

Ibrahim explained that NDIC made the decision in the light of the most recent report from its Off-Site Supervision of the DMBs which revealed the number of fraud cases attributed to internal abuse by staff of banks increased from 231 in 2016 to 320 in 2017, or 38.53% above the figure reported for the previous year.

It was observed that the report relied on a total of 286 responses received from 26 banks during the period. Also, there were 22 NIL monthly responses from the banks as at year ended 31st December 2017.

On Internet banking and ATM/Card-related fraud, the agency reported constituted 24,266 resulting in 92.68% of all the reported cases. It, however, regretted the avoidable loss of ₦1.51 billion of losses in the Industry in 2017.

The report also documented other miscellaneous crimes such as fraudulent transfers/withdrawals, cash suppression, unauthorized credits, fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, presentation of forged or stolen-cheques among others.

It is expected that banks would adopt internal control measures in the wake of proactive corrective measures taken to ensure their compliance with good corporate governance principles.