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H1’18: Banks’ losses to fraudsters rise by 1,446% to N12bn

By Yinka Kolawole

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.


“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.

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“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.”



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