NDIC advocates collaboration to combat banking fraud

The Nigeria Deposit Insurance Corporation has called on law enforcement agencies to strengthen their collaboration to curb banking fraud in the country.

 The Managing Director/Chief Executive of NDIC, Bello Hassan, said this on Thursday at the annual capacity-building workshop for law-enforcement agents in Lagos.

Hassan, represented by the NDIC Director of Communication & Public Affairs, Bashir Nuhu, said, “We are not unaware of the challenges of investigating and prosecuting financial malpractices and bank fraud cases but wish to urge you not to relent on your efforts and be rest assured of our unflinching support at all times.

“The banking system is rapidly evolving with innovations, it is clear that a new phase of the financial technology-driven economy is currently reshaping the global financial services space. With this development, the criminally minded users of the banking system, including the 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. The law enforcement officers must acquaint themselves with basic knowledge of the types of fraud prevalent in our banks.”

He added that the measures put in place by regulatory/supervisory agencies to curb the activities of fraudsters in the system were starting to yield results.

“The authorities are becoming more proactive with policies and examinations/investigations to ensure that the banks/financial institutions strengthen their risk management practices to prevent loss of funds and maintain depositors’ confidence in the banking system.

“The advancements in information technology that open new possibilities and vistas in banking operations have equally exposed the banking subsector to emerging threats. This situation increases the burden on the regulators and supervisors to enhance their operational capacities. It has also heightened 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, called for improved collaboration to fight financial crimes, especially as it relates to insider fraud.

 “It is worthy of note that the corporation, as part of its bank liquidation activities, has been in the vanguard of the investigation and prosecution of those found culpable in a bank failure. The corporation is, therefore, committed to building the capacity of law enforcement agencies. The corporation collaborates with others in the fight against financial malpractices to ensure that the desired results are achieved timely and effectively.

 “This fight against insider abuses and financial malpractices in banks is not the task the corporation can carry out all alone, and that 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’ is apt to emphasise the need for collaboration,” he averred.

 Representing the Executive Chairman of the Economic and Financial Crimes Commission, Olanipekun Olukoyede, the Commander of the EFCC Lagos Zonal Command, Michael Wetkas, lamented that insider fraud had assumed an alarming dimension.

 “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, which resulted 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,” he noted.

 The Financial Institutions Training Centre, in its fraud and forgeries report for Q1 2024, revealed that commercial banks sacked 35 of their employees between January and March over fraud.

 In his comments, the Assistant Inspector General of Police in charge of FCID Annex, Alagbon, Ikoyi, Lagos, Romokere Ibani, charged participants at the workshop to collaborate to ensure the stability of the banking sector.

 “There is every need for us to be more sceptical, more 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,” he said.

 The NDIC recently held a workshop for judicial workers in Lagos.