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Banks recorded N18bn fraud cases in 2015 — NDIC

By on June 30, 2016

The banking sector recorded 12,279 fraud cases involving the sum of N18.02bn in the 2015 financial period, the Nigeria Deposit Insurance Corporation disclosed on Tuesday.

The corporation, in its 2015 annual report and statement of account for the banking sector, stated that the 12,279 reported cases for 2015 represented an increase of 15.71 per cent over the 10,612 recorded in 2014.

However, the report explained that while the sector recorded a 15.71 per cent increase in the incidence of fraud for 2015, the amount involved decreased by N7.59bn or 29.63 per cent from N25.6bn in 2014 to N18.02bn.

In terms of the actual amount lost to fraudsters from the incidences of fraud, the NDIC report explained that the sector suffered a total loss of N3.17bn as against N6.19bn in 2014.

The report stated, “A total of 12,279 fraud cases were reported, representing an increase of 15.71 per cent over the 10,612 fraud cases reported in 2014. However, the amount involved decreased significantly by N7.59bn or 29.63 per cent from N25.60bn in 2014 to N18.02bn in 2015.

“Similarly, the actual loss suffered by the insured banks decreased by N3.02bn or 48.79 per cent from N6.19bn in 2014 to N3.17bn in 2015.”

Explaining how the losses through fraud were suffered by the banking sector, the report stated that actual loss sustained in respect of Internet banking fraud was N857m, representing 27 per cent of the total actual loss for the industry.

It added, “There was an increase in the frequency of ATM/card-related cases from 7,181 in 2014 to 8,039 in 2015, an increase of 11.95 per cent.

“However, the loss suffered by the industry due to such frauds declined significantly by 59.4 per cent from the previous year figure of N1.24bn to N0.50bn, representing 15.9 per cent of the total industry loss to frauds and forgeries.”

The NDIC report noted that out of the 12,279 fraud cases reported by Deposit Money Banks in the last fiscal year, 425 cases were attributed to members of staff, adding that this figure showed a decrease over the 465 recorded in 2014.

Similarly, it noted that losses arising from fraudulent activities of bank workers decreased by 70 per cent from N3.16bn in 2014 to N970m in 2015.

The highest percentage of frauds and forgeries cases of 38.59, according to the report, was perpetrated by temporary workers in the banking industry.

In terms of NDIC’s operational performance, the corporation said in compliance with the provisions of the Fiscal Responsibility Act, it remitted the sum of N24.18bn to the Consolidated Revenue Fund of the Federation in 2015 as against N15.38bn in the previous year.

It put the operating surplus for 2015 at N30.23bn as against N15.52bn in 2014.

The report stated that the corporation made a cumulative payment of N6.79bn to 426,324 insured depositors of the closed DMBs as of the end of December 2015 as against N6.79bn to 426,320 insured depositors in 2014.

Similarly, it said the sum of N95.77bn was paid as liquidation dividend to depositors of the DMBs in 2015 compared to N94.74bn as of December 31, 2014.

In terms of loan recovery, the report put the cumulative amount of loans recovered at N27.41bn as of December 31, 2015, compared with N26.75bn at the end of 2014.