Civil Society Network Against Corruption (CSNAC) is a coalition of over hundred and fifty Anti- corruption organizations whose primary aim is to constructively combat corruption vigorously and to ensure the effective monitoring of the various Anti-graft agencies in its activities in the fight against corruption and to enthrone transparency, accountability, probity, and total commitment in the fight to eradicate corruption in Nigeria.
Yearly, money lost by the Deposit Money Banks (DMB) to fraud and forgeries persists according to the annual reports of the Nigeria Deposit Insurance Corporation (NDIC); despite the fact that the banking industry is the most controlled and regulated industry in Nigeria. Olaoye and Dada (2014) of the Department of Accounting, Faculty of Management Sciences, Ekiti State University, Ado-Ekiti, Ekiti State, in their Paper titled ‘Analysis Of Frauds In Banks: Nigeria’s Experience’, wrote that, Fraud in the Nigerian banking system has eaten deep into every units and department in the sector and that, the level of fraud in the present day Nigeria has assumed an epidemic dimension. It has been forecasted that, Nigeria with all its human and natural resources, tethers on the brink of failure because of fraud.
PremiumTimes and The Nation on November 29, 2012 reported an NDIC report showing that in 2011, the banking industry lost N4.07billion with 2,352 cases reported, an increase of 53.5 per cent in the total number of fraudulent cases reported in 2011, compared to 2010 when 1,532 cases were reported; the amount of fraud and forgeries increased by 33.40 per cent from 21.29 billion in 2010 to 28.40 billion in 2011.
The NDIC report of 2013, according to ThisDayLive on December 03, 2014, stated that the Nigerian banking sector recorded an 11.12 per cent rise in cases of financial fraud losing N5.76 billion in 2013 of which N2.5 billion was recorded in the first quarter of the year alone. It said the total fraud cases reported stood at 3,756 compared to 3,380 cases in 2012; showing that, the amount involved in the fraud incidences also grew to N21.79 billion in the period under review compared to N18.05 billion the previous year.
The table below is the total amount in Fraud and Forgeries from 2002-2012, sourced from the Paper by Olaoye and Dada (2014) as adapted from the NDIC annual reports of those years.
Punch, ThisDayLive and BusinessToday on July 8, 2015 related the details of the recent report given by the NDIC. According to their account, Deposit Money Banks (DMBs) lost a total sum of N25.61 billion to fraud and forgeries within the banking system in 2014 representing, an increase of N3.81 billion or 17.5 per cent compared to N21.80 billion lost in the previous year. Also, a total of 10,612 fraud cases were recorded in 2014 compared with 3,786 cases in 2013, representing an increase of 182.77 percent. The expected/actual loss in fraud and forgeries therefore increased from 5.76 billion in 2013 to 6.19 billion in 2014, representing an increase of 7.57 per cent.
The causes for the number of cases of frauds and forgeries over time, as stated by the NDIC have been attributed to the rise in the incidence of web-based (online banking)/ATM, fraudulent transfer/withdrawal of deposit frauds and suppression of customers’ deposits.
Seeing the trend in the increase in the number of cases of frauds and forgeries over the years, with the most recent 2014 being 10, 612, a 182.77% increase from the previous year, and the impending danger being posed to the Nigerian economy if this situation is not stemmed;CSNAC hereby calls on your office, by the powers vested on the unit, and the Police Force to urgently:
Officially demand and receive a copy of the NDIC report from the corporation;
Invite officials of the corporation to elucidate on the report with necessary information on each of the cases reported;
Conduct water-tight investigation into the frauds and forgeries in the banking industry as reported by NDIC especially for the year 2014 and;
To prosecute those found culpable.
We are not in doubt that the failure of your unit and other anti-corruption agencies to stem the tide of this humongous economic sabotage and violation of the country’s extant laws is responsible for this calamitous surge in what can be considered the worst form of corruption in the private sector.
We shall look forward to your prompt action on this petition.
Cc: Inspector General of Police
Louis Edet House, Garki, Abuja