The Nigerian Deposit Insurance Corporation just released its 2013 Annual Report revealing an interesting and chilling data on fraud cases in the banking sector. Here are the key highlights
- The banking sector recorded 3,756 fraud cases involving the sum of N21.79bn in the 2013 financial period, the Nigeria Deposit Insurance Corporation has said.
- The corporation, in its 2013 annual report and statement of account for the banking sector, stated that the cases represented an increase of 11.12 per cent over the 3,380 fraud cases, which the sector recorded in 2012.
- The report said while the frequency of fraud cases rose by 11.12 per cent within the period under review, the sector recorded a 20.8 per cent increase in monetary value from N18.05bn in 2012 to N21.79bn.
- In terms of actual loss from the fraud cases, the report said the sum of N5.75bn might not be recovered, adding that this was N1.24bn or 27.4 per cent higher than the N4.51bn recorded in 2012.
- The report added, “The highest expected/actual loss of N2.5bn occurred in the first quarter ended March 2013, which represented 47.4 per cent of the total industry expected/actual loss.”
- Giving a quarterly breakdown of the amount involved, the report stated that N7.80bn fraud cases were recorded in the first quarter while the second, third and fourth quarters had N4.85bn, N3.84bn and N5.28bn, respectively.
- In terms of number of fraud cases, it stated that 983 cases were recorded in the first quarter while the second, third and fourth quarter each had 768, 1,067 and 938 cases, respectively.
- For the proportion of losses, the report said that N2.51bn was expected to be lost in the first quarter, while the sums of N1.16bn, N906m and N1.18bn were lost in the second, third and fourth quarter, respectively.
- It noted that the Automated Teller Machine fraud cases accounted for 1,739 cases; Internet banking, 316 cases; suppression of customers’ deposits, 324 cases; and fraudulent transfer, 394 cases.
- Other cases with high frequency are fraudulent conversion of cheques; 219 cases; presentation of stolen cheques, 196 cases; unauthorised credits, 132 cases; presentation of forged cheques, 118 cases; and outright theft by bank employees, 116 cases.
- It said, “During the year under review, the major types of frauds as reported by Deposit Money Banks included ATM fraud, fraudulent transfer, Internet banking fraud, cash suppression, unauthorised credits, fraudulent conversion of cheques, diversion of customer deficits and presentation of forged cheques.
- “Out of the 3,756 fraud cases, 682 were attributed to staff collaboration, depicting an increase of 151 or 28.44 per cent of such fraud cases over the 531 cases reported in 2912.”
- In terms of the categories of bank employees involved in fraud and forgeries, the report stated that officers, accountants and executive assistants constituted 34.31 per cent of the total number of workers.
- It added that temporary members of staff, clerks and cashiers, supervisors and managers accounted for 21.11 per cent, 18.77 per cent and 14.22 per cent of the total staff involved in fraud and forgeries in 2013, respectively.
- The NDIC report noted that messengers, drivers, cleaners, security guards and stewards accounted for just 4.99 per cent of bank workers involved in fraudulent activities.