NDIC – Nigerian banks lost N28.40bn to fraud in 2011

Insured deposit money banks were in 2011 defrauded to the tune l of N28.40 billion, with expected loss of about N4.071 billion, THISDAY has gathered.
The amount was said to have been lost in 2,356 cases of fraud and forgeries, representing an increase of 53.5 per cent over 1,532 cases reported in 2010.

It was further learnt that the amount of fraud and forgeries increased by 33.40 per cent from N21.29 billion in 2010 to N28.40 billion in 2011, while the expected loss decreased by 65 per cent from N11.68 billion in 2010 to N4.07 billion in 2011.

The 2011 Nigeria Deposit Insurance Corporation (NDIC) annual report and statement of accounts made available to THISDAY in Benin City reported that the offences were committed with Automated Teller Machines (ATM), fraudulent transfer/withdrawal of deposit, presentation of forged cheques, and outright theft.

Others offences include suppression of customer deposit, fraudulent conversion of cheques, non- dispensing of money but registered by the electronic journal and internet fraud.

The report added that the offences were committed more in the top ten banks, which accounted for 87.1 per cent of the banking industry fraud in the year under review; compared to 51.08 per cent recorded in 2010.

The NDIC statement further noted that the top ten banks lost N24.73 billion in 2011 as against N10.87 billion in 2010, while the whole banks loss was N28.40 billion in 2011 and N21.29 billion in 2010.

ATM and fraudulent transfers/withdrawals with reported cases of 738 and 331 were said to have accounted for the largest number of perpetrators. Out of the 2,352 fraud cases during the period under review, 498 were attributed to staff/staff participation; representing an increase of 141 from 357 cases reported in 2010.

It posited that the number of staff involvement increased by 39 per cent in 2011 as against the previous year, just as the statement disclosed that the highest number of bank officials involved in cases of fraud and forgeries were from the clerks and cashier status while the lowest was from the typist, technicians and stenographers.

The statement listed the status of staff and their position in the involvement of frauds and forgeries to include, supervisors/managers 89, representing 17.87 per cent; and officers, accountants /executive assistants 126, which represented 25.30 per cent.

Others, according to the report, are clerks/cashers 163, representing 32.73 per cent; messengers, drivers, cleaners, security guards and stewards 35, representing 7.03 per cent; and temporary staff members 78, which represented 15.66 per cent.

NDIC also revealed that as part of efforts to sanitise the microfinance sub-sector about 55 directors, staff and other related parties that were responsible for the collapse of 19 micro-finance banks were prosecuted to serve as deterrent to would-be fraudsters in the sector.

As part of plans to checkmate the incidences of frauds and forgeries in the sector, the corporation said all insured banks should employ measures to strengthen their operational risk management frameworks in the areas of internal control and security system among others.

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