Wednesday, December 19, 2018 4:13:36 PM- Nigerian Stock Exchange.



  Banks accused on hiding fraud cases from regulators

      

March 12 (Lagos) - Nigerian Deposit Insurance Corporation (NDIC) has accused Banks of hiding fraud information from regulators according to a statement released by the corporation over the weekend. 



“The NDIC is to investigate some banks for the inadequate rendition of returns to the corporation 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.



The NDIC is to investigate some banks for the inadequate rendition of returns to the corporation 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.



The 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 percent above the figure reported for the previous year."



The 22 licensed commercial Banks and 4 Merchant banks rendered 286 Returns on Dismissed/Terminated staff as a result of fraud and forgeries during the year under review. Out of the 26,182 fraud cases reported by the 26 licensed banks, 320 cases were attributable to internal collaboration by bank staff. A total of 320 bank employees had their appointments either terminated or were summarily dismissed in 2017, as against 231 in 2016. That represented an increase of 38.53 percent in the total number of fraud cases reported in 2017. However, the losses arising from the reported cases decreased from N 760 million in 2016 to N 682 million or about 11.43 percent in 2017."



In our view, this investigation could unravel a can of worms in the Nigerian banking industry. There have been rumors of frauds happening in the banking industry and now with this accusation from NDIC, we are indeed going deep into the books of banks. 



We have already seen massive frauds being uncovered in the Indian banking system this year tot he tune of USD 3 billion involving top level staff of banks conniving with fraudsters, which have led to stock prices of banks crash over there and hopefully the same will not be the case in Nigeria.  



No banks have been named so far but we can expect most of them to be involved if NDIC is talking in the manner it did over the weekend. 



reporting for easykobo.com on Monday, March 12 2018 from Lagos, Nigeria



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