NDIC: Banks Record N9.3bn Fraud in 2003
From Kunle Aderinokun in Abuja
A total of N9.383 billion fraud cases were recorded last year in banks operating in the country, the Nigeria Deposit Insurance Corporation (NDIC) said at the weekend.
However, about N8.6 billion representing 92 per cent of the total fraud cases were recorded in just 10 of the banks.
Also, the 2003 figures represent a decrease from the N12.919 billion recorded in 2002. But the corporation did not reveal the names of the banks where the fraud cases were recorded.
In its 2003 Annual Report and Statement of Accounts released at the weekend, the NDIC said the reported cases of fraud increased significantly from 796 in 2002 to 850 in 2003 indicating a rise by 6.8 per cent.
The NDIC said at the end of 2003, it paid the sum of N5.284 billion or 53 per cent as liquidation dividends out of the total declared dividends of N9.9 billion for 32 out of the 34 banks in liquidation as at December 31, 2003.
According to the corporation, the figure "compared favourably with the dividend payment of N3.860 million and the declared dividend of N7.479 billion respectively for the year 2002."
The NDIC noted that the commonest types of fraud perpetrated were: presentation of forged cheques and dividend warrants; granting of unauthorized loans; posting of fictitious credits; suppression of cheques and defalcations; fraudulent transfers and withdrawals; loss of money to armed robbers; and outright theft of money.
In analyzing the fraud and forgeries, the corporation stated that "fraudulent transfer and withdrawals constituted the largest proportion with regard to the amount in fraud cases and expected loss as against what obtained in 2002 when presentation of forged cheques occupied the first position."
"Presentation of forged cheques occupied the second position both in terms of the amount involved (27.09 per cent) and the expected loss (24.41 per cent)," the NDIC added.
Further analysis, according to the corporation, showed that, "similar to what obtained in 2002, these two types of fraud that is, the fraudulent transfer and withdrawals and presentation of forged cheques were jointly responsible for about 79 per cent of the total amount involved in major fraud cases and about 65 per cent of the total expected loss during the same period."
It added that "suppression of cheques (7.69 per cent) and loss of money to armed robbers (7.13 per cent) occupied third and fourth positions respectively as regards total amount involved in reported cases of frauds and forgeries and total expected loss."
While disclosing that "granting of unauthourized loans (2.66 per cent) and outright theft (2.15 per cent) occupied the fifth and sixth positions in terms of total amount involved of reported cases of fraud, with outright theft coming fifth in terms of total expected loss," the NDIC noted that "posting of fictitious credit (2.52 percent) took the sixth position in terms of expected loss."
Meanwhile, the corporation noted that 106 banks staffers were reported to be involved in frauds and forgeries during the year under review. This translated to an increase of about 24.7 per cent when compared with the previous year.
"That means that higher number of staff perpetrated frauds and forgeries during the period under review. Of the total, core operational staff such as supervisors, officers, accountants, managers, executive assistants, clerks and cashiers accounted for about 85.84 per cent, a decrease of 4.8 percentage points relative to the previous two year's levels," the NDIC explained.
However, the corporation said it had so far declared 100 per cent dividend (that is full recovery) for the uninsured depositors of nine closed banks as at December 31, 2003. The affected banks were: ABC Merchant Bank Limited; Alpha Merchant Bank Plc; Amicable Bank of Nigeria Limited; ICON Limited (Merchant Bankers); Kapital Merchant Bank Limited; Nigeria Merchant Bank Limited; Pan African Bank Limited; Premier Commercial Bank Limited; and Rims Merchant Bank Limited.
The corporation said it "realized a cumulative sum of N3.984 billion from the sales of physical assets of closed banks and made cumulative recoveries of N4.895 billion from the debtors of the closed banks."
It explained that "the recovery of debts of banks in liquidation, as in the previous years had been very difficult because of the protracted legal process and the fact that many loans were improperly granted and unsecured."
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