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NDIC to probe banks for alleged fraud

The Nigeria Deposit Insurance Corporation (NDIC) says it is set to probe some commercial banks in the country for alleged fraud.

The NDIC’s spokesperson, Mohammed Ibrahim, said in a statement sent to PREMIUM TIMES on Sunday that the affected banks have been making inadequate returns on their transactions.

Mr. Ibrahim said the probe was pursuant to Sections 35 and 36 of the NDIC Act No. 16 of 2006 which demands all Deposit Money Banks (DMBs) to submit accurate and up-to-date monthly information/returns on fraud and forgeries to the Corporation.

He did not disclose the names of the affected banks.

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

He said the banks were indicted for failing to submit full returns on instances of fraud, forgeries involving members of their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.

The NDIC spokesperson said the decision to probe the banks followed the recent report from its Off-Site Supervision team about the involvement of some DMBs in some fraudulent transactions.

The report of the team, which disclosed the number of fraud cases, attributed the incidents to internal abuse by staff of the banks.

In 2017, the report said cases of frauds in banks increased from 231 in 2016 to 320, or 38.53 per cent above the figure reported for the previous year.

The report said it relied on a total of 286 responses received from 26 banks during the period under review

By December 31, 2017, the report said the banks made no returns of any fraud in 22 responses.

On Internet banking and ATM/Card-related fraud, the Commission said 24,266 resulted cases constituted about 92.68 percent of all the reported cases.

It, however, expressed regrets for the avoidable loss of ₦1.51 billion in the Industry in 2017 as a result of the incidents.

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

The affected banks were expected to adopt internal control measures in the wake of proactive corrective measures to ensure compliance with good corporate governance principles.


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