The Nigeria Deposit Insurance Corporation NDIC has threatened to impose sanctions on some Deposit Money Banks in the country for alleged fraud.
Mohammed Ibrahim, NDIC Spokesman, revealed that the erring banks have been making inadequate returns on their transactions. He, however, refused to mention the affected banks.
According to Sections 35 and 36 of the NDIC Act No. 16 of 2006 which makes it mandatory for all Deposit Money Banks (DMBs) to submit accurate and up-to-date monthly information/returns on fraud and forgeries to the Corporation.
The affected banks were found culpable for failing to submit full returns on cases of fraud and forgeries involving their staff who were either dismissed or had their appointments terminated on grounds of fraudulent activities.
The decision to probe the affected banks was sequel to a report from NDIC’s offSite supervision team about the involvement of some DMBs in fraudulent transactions.
It shows the number of the reported cases of frauds in banks increased from 231 in 2016 to 320 in 2017 which equals 38.53 percent above the figure reported for the previous year.
The findings which relied on a total of 286 responses received from 26 banks during the period under review revealed that by December 31, 2017, the banks made no returns of any fraud in 22 responses.
In his words:
“The 286 responses received from banks in 2017 cited 26,182 cases of fraud and forgeries which is 56.30 percent higher compared to 16,751 cases reported in 2016.”
The report also showed the amount involved in the fraudulent activities documented increased by ₦3.33 billion from the  ₦8.68 billion reported in 2016 to ₦12.01 billion in 2017 or 38 percent.
The off-site supervision of the NDIC usually involves the receipt and analysis of returns from insured banks on a periodic basis to ascertain the banks’ compliance with prudential regulations.
The returns are basically requirements of the regulatory/supervisory authorities from the banking institutions which are made on determined periodic basis to assist in ensuring that the banks conform to desired operating rules.
The Nigeria Deposit Insurance Corporation was established in 1989, as an independent agency of the Federal Government of Nigeria.
The purpose of a deposit insurance system is to protect depositors and guarantee the settlement of insured funds when a deposit-taking financial institution can no longer repay their deposits, thereby helping to maintain financial system stability.
