20 March 2014

Nigeria: How Bankers Stole N3.8 Billion From Customers

Despite stricter internal control processes as stipulated by the Central Bank of Nigeria (CBN), bankers in the country still succeed in stealing more money from their customers.

Data released by the CBN indicated that the amount stolen by bankers from their customers increased by a whopping 60.8 per cent to N3.8 billion in the first half of 2013 compared to the N2.5 billion stolen in the corresponding period of 2012.

This rise in stealing from customers has also reflected in the rising number of bankers arraigned before different courts for alleged stealing of various amounts of money.

The data contained in the Economic Report for the first half of 2013 also indicates that the bankers attempted to steal a total of N22.4 billion during the period compared to N7.1 billion attempted theft in the corresponding period of 2012.

"There were 2,478 reported cases of fraud and forgery valued at N22.4 billion during the period.

"This was higher than the 2,300 recorded cases valued at N7.1 billion in the corresponding period of 2012. Of this amount, actual loss incurred by the banks was N3.8 billion representing 17.1 per cent of the total fraud amount, compared with N2.5 billion in the corresponding period of 2012.

According to the CBN, the frauds were carried out through diverse means including fraudulent withdrawals from customers' accounts, suppression and conversion of customers' deposits, theft, illegal funds transfer, cheque defalcations, and fraudulent ATM withdrawals.

The apex bank stated that a total of 759 complaints were made by the banking public against deposit money banks (DMBs) in respect of excess charges, conversion of deposit, unauthorised deductions, among others, in the first half of 2013.

Out of this, 88 petitions were resolved while the remaining were at various stages of resolution. Total claims from customers against the DMBs at the end of June 2013 in relation to the complaints amounted to N5.73 billion and $1.05 million, while total refunds by the DMBs stood at N1.45 billion and $829.22 respectively.

According to the apex bank, measures such as implementation of stricter internal control, improved technology audit to routinely check employees' activities and a more thorough approach to hiring employees for highly sensitive areas of operation have been recommended to the banks to mitigate the increased operational risk as a result of these frauds.

It is also expected that the biometrics project also being implemented in the banking system as well as the National Identification Number scheme would help to reduce the level of fraud perpetrated on bank customers' accounts since it would make it very difficult for anyone other than the real owner to have access to an account.

Banks have already commenced the registration of customers following the biometrics solution project instituted by the CBN and the Bankers' Committee at the cost of $50 million.

The exercise would provide a central database for all bank customers across the country.

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