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Nigerian Banks record N21bn frauds in one year

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ABUJA-The banking sector recorded 3,756 fraud cases involving the sum of N21.79bn in the 2013 financial period, the Nigeria Deposit Insurance Corporation has said.

The corporation, in its 2013 annual report and statement of account for the banking sector, stated that the cases represented an increase of 11.12 per cent over the 3,380 fraud cases, which the sector recorded in 2012.

The report, released on Tuesday, was jointly signed by the NDIC Board Chairman, Dr Hassan Adamu and the Managing Director, Alhaji Umaru Ibrahim.

The report said while the frequency of fraud cases rose by 11.12 per cent within the period under review, the sector recorded a 20.8 per cent increase in monetary value from N18.05bn in 2012 to N21.79bn.

In terms of actual loss from the fraud cases, the report said the sum of N5.75bn might not be recovered, adding that this was N1.24bn or 27.4 per cent higher than the N4.51bn recorded in 2012.

It said, “A total of 275 responses were received from 21 commercial banks, one non interest bank and two merchant banks during the year under review.

“Out of the 272 responses received, 3,756 fraud cases were reported in 2013 as against N21.79bn reported in 2012, showing an increase of 11.12 per cent.”

The report added, “The highest expected/actual loss of N2.5bn occurred in the first quarter ended March 2013, which represented 47.4 per cent of the total industry expected/actual loss.”

Giving a quarterly breakdown of the amount involved, the report stated that N7.80bn fraud cases were recorded in the first quarter while the second, third and fourth quarters had N4.85bn, N3.84bn and N5.28bn, respectively.

In terms of number of fraud cases, it stated that 983 cases were recorded in the first quarter while the second, third and fourth quarter each had 768, 1,067 and 938 cases, respectively.

For the Nigerian Banks Agree to cut Interest Rates proportion of losses, the report said that N2.51bn was expected to be lost in the first quarter, while the sums of N1.16bn, N906m and N1.18bn were lost in the second, third and fourth quarter, respectively.

It noted that the Automated Teller Machine fraud cases accounted for 1,739 cases; Internet banking, 316 cases; suppression of customers’ deposits, 324 cases; and fraudulent transfer, 394 cases.

Other cases with high frequency are fraudulent conversion of cheques; 219 cases; presentation of stolen cheques, 196 cases; unauthorised credits, 132 cases; presentation of forged cheques, 118 cases; and outright theft by bank employees, 116 cases.

It said, “During the year under review, the major types of frauds as reported by Deposit Money Banks included ATM fraud, fraudulent transfer, Internet banking fraud, cash suppression, unauthorised credits, fraudulent conversion of cheques, diversion of customer deficits and presentation of forged cheques.

“Out of the 3,756 fraud cases, 682 were attributed to staff collaboration, depicting an increase of 151 or 28.44 per cent of such fraud cases over the 531 cases reported in 2912.”

In terms of the categories of bank employees involved in fraud and forgeries, the report stated that officers, accountants and executive assistants constituted 34.31 per cent of the total number of workers.

It added that temporary members of staff, clerks and cashiers, supervisors and managers accounted for 21.11 per cent, 18.77 per cent and 14.22 per cent of the total staff involved in fraud and forgeries in 2013, respectively.

The NDIC report noted that messengers, drivers, cleaners, security guards and stewards accounted for just 4.99 per cent of bank workers involved in fraudulent activities.

Given this development, the corporation said it was imperative for banks to employ measures to strengthen their operational risk management frameworks in the areas of internal control and security systems in order to reduce cases of fraud and forgeries.

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Business

Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies. 

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Yemie ADEOYE

INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.

Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.

Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.

This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.

Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”

Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.

However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.

Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.

In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.

He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”

“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.

“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”

Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”

It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.

 

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Banking

CBN Denies Currency Devaluation

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CBN Pegs Interest Rate at 14%

 

The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.

 

Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.

 

However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.

 

In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.

 

However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’

 

“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.

 

“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.

 

He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.

 

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Banking

BREAKING: CBN Increases Interest Rate By 0.5%

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CBN Pegs Interest Rate at 14%

 

The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.

 

The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.

 

Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting,  thereafter.

 

While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

 

In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.

 

Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”

 

Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.

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