CENTRAL Bank of Nigeria (CBN) has reported a staggering 1,446 percent rise in banks’ losses to fraudsters amounting to N12 billion within the first six months of 2018. The apex bank reported this in its 2018 Half-Year Report (H1’18) released last week, while lamenting prevalence of deficiencies in banks’ ability to curb financial crimes and money laundering activities in their operations.
The report stated: “There were 20,768 reported cases of fraud and forgery (attempted and successful), valued at N19.77 billion in the review period, compared with 16,762 cases, involving N5.52 billion and $ 0.12 million in the corresponding period of 2017. The actual loss by banks to fraud and forgery, however, amounted to N12.06 billion, compared with the N0.78 billion and US$0.03 million, suffered in the first half of 2017. CIBN “The reported fraud and forgery incidences were perpetrated by both bank staff and non-bank culprits.The cases involved armed robbery attacks, fraudulent ATM withdrawals”. Lamenting deficiencies discovered during an Anti Money Laundering/Counter Financing Terrorism (AML/CFT) risk management examination of all reporting banks in H1’18, the apex bank further stated: “Certain deficiencies existed across banks in the following specific areas: “Non-conduct or inadequacy of enhanced due diligence (EDD) on high risk customers, though improvement in the conduct of due diligence in the review period was observed; Non-automation of collation and reporting of foreign currency, suspicious transactions, and non-subjection of the AML/CFT software in some banks to independent testing to determine their efficacy and; The rise of AML/CFT Manuals in some banks, which did not highlight policies to address specific issues, such as virtual currencies, among others.
Investors anticipate higher rates as DMO offers N115bn FGN bonds “Inadequate internal control oversight over compliance, as recommended by the Financial Action Task Force (FATF) and required by the CBN AML/CFT regulations; and Existence of AML/CFT knowledge gap in many banks, as well as the inability of some banks to provide satisfactory evidence of conducting the required training.”
