Deposit money banks in Nigeria have reported a sharp rise in fraud cases and the amount of money lost in the second quarter of 2023, Q2’23.
The latest report also shows that the number of insider involvement rose astronomically.
The total amount involved in the fraud cases during the period rose to N9.75 billion, up by a whopping 276.98 per cent from N2.58 billion in the preceding quarter, Q1’23.
The total losses to the incident amounted to N5.79 billion during the period, representing a staggering 1,125 per cent rise compared with N472 million lost in the first quarter (Q1’23).
This was revealed in the new report released yesterday by the Financial Institutions Training Centre, FITC, on Fraud and Forgeries in Nigerian banks for Q2’23.
FITC further noted that the losses were recorded by 24 banks that filed their returns on fraud cases for the period, adding that outsider involvement in the fraud cases dropped by 6.4 per cent, while staff involvement rose by 22.2 per cent within the period.
FITC is owned by the Banker’s Committee, which comprises the Central Bank of Nigeria, CBN, Nigeria Deposit Insurance Corporation, NDIC, all licensed banks, and discount houses in Nigeria.
It was established to provide innovative knowledge solutions and capacity building programmes that develop and strengthen resources for the Nigerian financial services sector.
According to the FITC report, fraudulent loans accounted for the highest loss at 94.35 percent with a value of N5.46 billion, followed by mobile fraud, which accounted for 3.39 per cent of the total loss amounting to N196 million.
The report stated: “During the second quarter of 2023, there were 11,679 reported cases, showing a 6.96 per cent decrease compared to the 12,553 cases in the first quarter. However, the data indicates a significant increase in the total amount involved in fraud cases. The amount rose from N2.59 billion in the previous quarter to N9.75 billion in Q2, representing a 276.98 per cent increase.
“Additionally, the amount lost also saw a substantial rise, increasing from N472 million in Q1 2023 to N5.79 billion in Q2 2023, which corresponds to an 1125.03 per cent increase. This increase might be attributed to the fact that banks were liable for the losses incurred and had to make refunds to customers.”
It further stated: “In Q2 2023, there was a 6.40 percent decrease in outsider involvement in fraud cases, with the number dropping from 12,351 cases in the previous quarter to 11,561 cases. However, staff involvement in fraud increased by 22.22 per cent, rising from 72 cases in Q1 2023 to 88 cases in Q2 2023. Conversely, the number of terminated appointments related to fraudulent activities decreased by 26.67 per cent, going from 15 cases in Q1 2023 to 11 cases in Q2 2023.”
Reacting, Association of Senior Staff of Banks, Insurance Institution, ASSBIFI, said it is a sad development for the nation’s banking industry, blaming the rising cases of staff involvement on casualisation of workers and other forms of non-pensionable employment practices in the financial sector.
