Fraud is a recurring word in all Nigerian dailies. A Nigerian newspaper seems incomplete without a report on fraud or fraudulent activities in public or private companies. It’s so common that, without deliberate monitoring, you might not even notice you’ve just read about it. So it has become a way of life. I was looking for another word to go with “bank” in the title of this piece to grab attention, but I couldn’t find a better word. Tying fraud to banks might get the attention it needs, but banks themselves are closely tied to fraud, given the havoc they have wreaked on certain individuals or businesses. So I thought if I doubled the two words – fraud and bank – it might be more appealing to readers.
Fraud no longer offends the sensibilities of many Nigerians as it is like a national robe and Nigerian banks are part of the environment. To behave differently is to be “un-Nigerian”. Or how do you explain the billions of naira spent on refinery repairs every year including in 2021 with no positive results and no one was sent to jail or questioned how those funds went down the drain evacuation of corruption? How is the federal government of this country arrogantly insisting on spending 3 trillion naira on fuel subsidies in 2022 even when there are options to look at how domestic fuel production could save the country more half of the amount; simply because some people feel they should spend or benefit from spending money? To expect Nigerian bank stakeholders to behave differently is to treat them as the saints they should be but are not.
Bad debts and fraud in banks have always been part of banking problems and both have anchored some banks in the world. In fact, the link between bad debts and fraud is slim. Many underhanded companies that already jeopardize the repayment of loans allegedly took place before the loan agreements were concluded. This is why banks are reluctant to publish the names of debtors, and when they are published, nothing concrete happens in terms of debt settlement. Of course, non-payment of debt is a fraudulent act in itself, but it has not been treated that way in ongoing discussions in the House of Representatives.
The Bank Clerks Act, etc. (declaration of assets), chap. B1, Laws of the Federation of Nigeria 2004, had prescribed a prison term of 10 years in addition to confiscation of assets for bank staff involved in fraud. The House of Representatives is now recommending that the prison sentence be increased to 20 years in addition to asset forfeiture. The bill passed second reading. The area of interest here is section 7(2) of the Act, which states inter alia that “any employee guilty of an offense under section shall, on conviction, be sentenced to imprisonment twenty years and shall, in addition, lose the active surplus or its cash equivalent to the federal government.The Honorable Francis Waive (Ughelli North/South/Udu), who led the debate on the bill, acknowledged the challenges posed by internet fraud, including the activities of yahoo boys, and their effects on banking operations He hopes the amendment will not only help to improve banks’ data base but, more importantly, deter others staff members and to reduce the upsurge of nefarious activities.There is also supposed to be simultaneous punishment for customers.
It is not news that bank employees commit fraud and go to jail. Since the introduction of the law, in the process of being amended, in 2004, many bank employees have gone to prison on the basis of it, and that should have deterred others, but no. Hence the amendment. Will this stop fraud in banks? It won’t be. We need to investigate what drives the action and attack head-on at the root with a view to reducing, if we cannot eliminate, fraud. We need to understand that bank fraud is also fueled by banks engaging in fraudulent acts against their staff and customers.
Most of the young employees we see in the bank lobby are casual employees. These young people grow up with the bank over time and are aware of the fact that they can be driven out of the banking business at any time and without adequate compensation. Many of these young people, who have worked for more than ten years, have from time to time been dismissed or relieved of their duties unceremoniously. This has been the trend of events over the past 20 years. The issue of staff dedication is very important for the growth of the company they work for. Dedication itself depends on a number of factors, including job security and staff well-being.
Casual staff have no job security and would wonder how to protect themselves against an uncertain future. In a banking environment, where their daily task is to manage funds, the first thought is how to secure their future with such funds. This is a major source of increasing fraudulent activity in banks. Bank management effectively discouraged union activities in the banking system so that staff had no voice in defending their rights and could be treated in a worn-out and dumped manner. The House of Representatives will have to address this ungodly attitude of casualizing workers to protect workers, banks and customers.
The fraudulent activities of banks towards customers also require attention as do the fraudulent acts of customers on the banking system. The House will have to investigate why banks should charge customers fees on virtually all transactions. Banks are aware that their services on electronic transactions are not perfect, but deliberately play with customers. Until now and normally customers were allowed to withdraw up to N20,000 from ATMs owned by other banks, but most of them now only allow withdrawals of N10,000 so that the customer can make the three mandatory withdrawals from the other machine and start paying a penalty, which will likely be paid for the rest of the month due to an inefficient internet supply or service provider.
One of the banks I use regularly always deducts fees for transferring funds to another person’s account with the same bank, so I have to suspend its use as my primary business account. Sometimes a bank would deduct the card management fee, even if you didn’t use the account for a month. Other times you lose your card in the ATM or there are multiple deductions, or it can take you days to recover, if you don’t eventually have to give up your money. You can also imagine receiving smelly cash at the ATM, but neat bills are found with currency peddlers at parties! Some banks would even send you birthday wishes on the wrong dates for some reason you may never know.
What does the House of Representatives think of all these great men, who have been caught defrauding banks, causing huge bad debts that are putting some banks in trouble? These people brought down the defunct National Bank, like many other banks in this category, in the 1990s. Some names were published but we never knew what punishment they faced, except that some of them they contested the elections the following years and won. Some names have been released recently and nothing seems to happen beyond the release of the names. I suspect they will contest the next election and win. Thus, the compromise to defraud comes not only from within the banking system but also from outside.
Why would such acts not encourage a young man or woman, who has worked with good qualifications in a bank for more than 10 years as a casual laborer, not knowing when he or she will be thrown on the job market, to take advantage of failures to commit fraud. As the Chamber tries to prevent fraud in banks, it should also prevent banks from engaging in fraudulent practices. Banks are meant to embody truth, trust and reliability. Bankers must seek restitution themselves; the Chartered Institute of Bankers of Nigeria has the daunting task of cleaning up this heinous picture while the Central Bank of Nigeria should return to the central bank instead of the current retail bank and launch the cassava or rice pyramid.
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