The Nigeria Deposit Insurance Corporation (NDIC) has called on law enforcement agencies to strengthen their collaboration to curb banking fraud in the country. This was emphasized by the Managing Director/Chief Executive of NDIC, Bello Hassan, at the annual capacity-building workshop for law enforcement agents in Lagos on Thursday.
Represented by the NDIC Director of Communication & Public Affairs, Bashir Nuhu, Hassan stated, “We are not unaware of the challenges of investigating and prosecuting financial malpractices and bank fraud cases, but we urge you not to relent in your efforts. Be assured of our unflinching support at all times.”
He highlighted the rapidly evolving banking system driven by financial technology innovations, which are reshaping the global financial services space. “With this development, the criminally minded users of the banking system, including notorious cyber criminals, are busy perfecting their misplaced skills. This is why workshops like this are necessary to enable law enforcement officers to understand the dynamic operating environment and acquaint themselves with basic knowledge of the types of fraud prevalent in our banks,” he added.
Hassan noted that measures implemented by regulatory and supervisory agencies to curb fraudsters’ activities were beginning to yield results. “The authorities are becoming more proactive with policies and examinations/investigations to ensure that banks and financial institutions strengthen their risk management practices to prevent the loss of funds and maintain depositors’ confidence in the banking system. The advancements in information technology that open new possibilities in banking operations have also exposed the subsector to emerging threats. This situation increases the burden on regulators and supervisors to enhance their operational capacities and heightens the need for more collaboration between agencies involved in the fight against banking malpractice.”
In his welcome address, the Head of the NDIC Legal Department, Henry Fomah, stressed the importance of improved collaboration to combat financial crimes, particularly insider fraud. He remarked, “The corporation, as part of its bank liquidation activities, has been at the forefront of investigating and prosecuting those found culpable in bank failures. The corporation is committed to building the capacity of law enforcement agencies and collaborates with others in the fight against financial malpractices to ensure timely and effective results. This fight against insider abuses and financial malpractices in banks is not a task the corporation can carry out alone, which is why this year’s theme, ‘Effective Collaboration as a Strategy in the Fight Against Insider Abuses and Financial Malpractices in Banks and Other Financial Institutions in Nigeria,’ emphasizes the need for collaboration.”
Representing the Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Olanipekun Olukoyede, the Commander of the EFCC Lagos Zonal Command, Michael Wetkas, lamented the alarming increase in insider fraud. He noted, “In 2022, some staff of a commercial bank colluded and illegally increased the withdrawal limits of targeted accounts, providing external actors access to the banking system, resulting in the loss of millions of naira to the bank. The laxity with which fintechs are allowed to operate creates fertile ground for fraud. Point-of-sale operators have also been observed to be a convenient source for getting money out of the financial system. While successful reactive measures are admirable, prevention is crucial. This workshop is a platform for sharing best practices and strategies as a testament to the collective commitment to fostering a culture of transparency, accountability, and resilience in the financial sector.”
The Financial Institutions Training Centre’s fraud and forgeries report for Q1 2024 revealed that commercial banks dismissed 35 employees between January and March over fraud. The Assistant Inspector General of Police in charge of FCID Annex, Alagbon, Ikoyi, Lagos, Romokere Ibani, urged participants at the workshop to collaborate to ensure the stability of the banking sector. He stated, “There is every need for us to be more sceptical and circumspect about our financial dealings with the banks. I charge all the agencies present here to work together to protect our banking system. I hope that we will work together in a way that will bring relief to banks in Nigeria.”
The NDIC recently held a workshop for judicial workers in Lagos to further this cause.
