Deposit Money Banks in the country lost a total of N5.8bn to cases relating to fraud in 2011, a publication by the Central Bank of Nigeria has revealed.

According to the document, there were 2,527 reported cases of attempted fraud or forgery, involving N29.5bn, as against 5,960 cases involving N19.7bn and $19.2m in 2010.

Of this amount, the actual loss to the banks was N5.8bn, compared to N11.4bn and $10.98m 2010.

Also, the publication, revealed that the number of reported cases of attempted or open fraud or forgery in the banking industry declined in 2011. 

“The reduction in actual loss was as a result of improvements in risk management practices in the banking sector. The fraud cases were perpetrated through various means, including pilfering and theft, suppression and conversion of customer deposits, illegal funds transfer and fraudulent ATM withdrawals, among others,” it said.

In order to enhance consumer education and promote consumer rights on financial transactions with banks and other financial institutions in Nigeria, the Consumer Protection Office was mandated to address customer complaints.

It said, “The bank strengthened its consumer protection activities in the year. A consumer protection framework was developed, which included consumer literacy and education, complaints management, fair practices and collaboration with stakeholders, among others.”

It noted that the apex bank also issued relevant circulars to the banks and collaborated with the CPC on complaints management, consumer education and enlightenment, and information sharing.

The publication added, “The CBN received 1,926 complaints at end-December 2011, of which 1,510 were treated, resulting in a refund of N4.34bn by banks, compared with 1,526 complaints and a refund of N2.20bn in 2010. Most of the complaints bordered on conversion of invested funds, unauthorised and fraudulent withdrawals from customer accounts, excess charges, and staff matters.”

On cheque clearing, in 2011, the volume and value of cheques cleared nationwide increased by 11.0 per cent and 13.3 per cent to 37.72 million and N22.30tn from 33.99 million and N19.69tn respectively in 2010.

The regulator said the rise in volume was due largely to the slow implementation of the Federal Government’s e-payment policy in respect of taxes, staff salaries, pensions and contractors’ payments.

Source: Punch/Ademola Alawiye