EFCC links banks to 70% of financial crimes in Nigeria

THE Economic and Financial Crimes Commission (EFCC) has accused Nigerian banks of perpetrating about 70 per cent of the financial crimes in the country.

The anti-graft agency’s chairman, Ola Olukayode, revealed this on Monday, March 4, at the 2023 Annual Retreat and General Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), The Punch reported.

He lamented the increasing fraudulent activities of the financial institutions and stressed it was raising considerable challenges and concerns for the commission.

Financial crimes include fraud, money laundering, and terrorism financing.

It was not the first time the anti-graft agency had fingered Nigeria’s banks’ involvement in fraudulent acts, The ICIR can report.

In February 2019, the then-acting chairman of EFCC, Ibrahim Magu, accused 10 unnamed commercial banks of money laundering.

The issue has assumed a much more significant impact on the Nigerian economy for over two decades and has given the country a bad image in the international finance circle, according to a Nigerian researcher, Onipe Yahaya.

According to the Financial Institutions Training Centre (FITC), a financial research and advocacy organisation operated by the Central Bank of Nigeria (CBN), Nigerian financial institutions have reported N159 billion in losses to fraud cases since 2020.

The FITC, in its latest quarterly report on fraud and forgery issues in Nigeria’s financial institutions, disclosed that fraud cases rose by 276.98 per cent to N9.75 billion in the second quarter of 2023, from N2.58 billion in the first quarter of 2023, which resulted in a N5.79 billion loss, representing a 1,125 per cent rise compared with N472 million lost, The ICIR reported.

Early this year, The ICIR reported that FCMB Group Plc lost nearly N1billion to fraud and forgery for the financial year ended December 31, 2023, and in an earlier report that Access Bank lost N5.46 billion to fraudsters in first six months of 2023.

Bank managers perpetrate many of the fraud and forgery activities, The ICIR had also reported.

The Punch’s report showed that 110 top bank executives and junior staff members had been sacked for fraud-related cases in the past two years.

At its 57th quarterly general meeting held in December 2023, the ACAEBIN chairman, Prince Akamadu, tasked auditors to embrace artificial intelligence (AI) for data efficiency and fraud detection.

He urged the fintechs to be mandated to set up fraud desks and hotlines that could be reached when necessary, while he also suggested stricter measures for the bureau de change operators.

The president of the Chartered Institute of Bankers of Nigeria (CIBN) President, Ken Opara, the umbrella professional body for bankers in Nigeria, had called for the use of technology in internal audit, submitting that it was no longer controversial but was the way to go.

While accusing the banks of the many frauds committed, Olukayode, represented by the director of internal audit at EFCC, Idowu Apejoye, called for concerted efforts by relevant authorities and professionals to tackle the issue.



    He said bank-related fraud comprised outright selling of customers’ deposits, authorising loan facilities, forging, and other unhealthy and criminal practices.

    There are also those committed outside the banks, which he listed to include hacking, automatic teller machine (ATM) fraud, and conspiracy. 

    The absurd one is the collaboration between the bankers and the outsiders, the EFCC boss said, adding “It is estimated that about 70 per cent of financial crimes in Nigeria are traceable to the banking sector, this scenario is disturbing and unacceptable.” 

    He charged ACAEBIN to monitor banks’ activities.

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