Banking industry sees decline in fraud on NDIC surveillance


August 15, 2017 | 3:33 pm
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Nigerian banking industry recorded a decline in the rate of successful fraud incidences and extent of amount in losses in 2016, compared with 2015.
NDIC managing director/chief executive, Umaru Ibrahim, made this disclosure while delivering a lecture: “The Role of NDIC in Mitigating Corruption in the Nigerian Banks” at the general meeting of the Abuja chapter of the Alumni Association of the National Institute (AANI).
According to Ibrahim, who was represented by a deputy director, Research, Policy and International Relations Department, Hashim I. Ahmad, the reported cases of frauds, forgeries and outright theft involving bank staff recorded a huge decline of 48.12 percent from N18.02 billion in 2015 to N8.68 billion in 2016, while the actual losses to the nation’s banking industry dropped by 24.29 percent from N3.17 billion in 2015 to N2.40 billion in 2016.
Also, the level of attempted cases of frauds and forgeries declined by N0.329 billion or 11.94 percent from N2.756 billion in March 2017 to N2.427 billion in June 2017.
The NDIC boss also stated that although reported cases of fraud and forgeries rose by 36.42 per cent from 12,279 cases in 2015 to 16,751 cases in 2016, the reduction in the rate of successful fraud incidences and actual losses was an indication of improved regulatory/supervisory oversight, increased vigilance by banks and the deployment of improved security architecture in the banking industry.
He attributed the factors breeding corruption in Nigerian banks to poor corporate governance, infractions in foreign exchange operations, cumbersome legal process and lack of effective sanctions of offenders, amongst others.
Nigeria’s Banking Sector has largely rebounded as at the First Quarter of 2017 period as most banks that released results showed resilience in spite of the tough macro-economic landscape of the past two years.
Amid unfounded fears of weakness in Nigeria’s banking sector, tough and pre-emptive macro prudential regulation by the NDIC has made sure the sector remains sound and profitable.
The few banks that have released half year 2017 results such as Diamond, Zenith FCMB, FBNH, and Union and have seen growth in revenues.
Ibrahim reiterated that the NDIC in conjunction with the Central Bank of Nigeria (CBN) continuously supervise the banks to ensure their strict adherence to sound corporate governance practices. 
He added that issues bordering on unethical financial practices and the resolution of conflicts between customers and their banks were being addressed by the Bankers’ Committee.
The NDIC boss also noted the rising trend in the level of banks’ non-performing loans (NPLs) and stated that the NDIC had recommended the prohibition of Directors of licensed banks, including microfinance banks (MFBs) and primary mortgage banks (PMBs) from obtaining credit facilities from their respective banks.
Ibrahim pointed out that the NDIC collaborated with other stakeholders such as the Economic and Financial Crimes Commission (EFCC), Police Special Fraud Unit (PSFU) and the Financial Malpractices Investigation Unit (FMIU) to conduct investigations into banking malpractices.  He also stated that the NDIC provided capacity building programmes for the agencies in addition to seconding some NDIC Staff to the institutions to assist them in investigating financial crimes.
He called for continued cooperation and collaboration between regulatory/supervisory authorities, the banks, the general public and the government in the fight against corruption in the banking industry.
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August 15, 2017 | 3:33 pm
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