Banks linked to 70% of financial crimes in Nigeria – EFCC

By Ologeh Joseph Chibu

Nigerian Banks with their pot-bellied managers are linked to at least 70 percent of financial crimes in Nigeria, the Economic and Financial Crimes Commission (EFCC) has said.

The EFCC made the striking revelation on Monday, attributing about 70% of financial crimes in Nigeria to bank officials

Speaking at the 2023 Annual Retreat and General Meeting of the Association of Chief Audit Executives of Banks in Nigeria in Abuja, EFCC Chairman Olanipekun Olukoyode underscored the alarming trend of fraudulent activities permeating the banking sector.

Representing Olukayode, EFCC’s Director of Internal Audit, Idowu Apejoye, emphasized the urgent need for collaborative efforts among relevant authorities and professionals, particularly audit executives, to combat fraudulent practices within the sector.

He listed the multifaceted nature of banking fraud, encompassing both internal malpractices such as unauthorized disposal of customers’ funds and external threats like hacking and ATM fraud.

Of particular concern, he said was collusion between bank insiders and external actors, undermining the integrity of the entire financial system.

He stated, “Broadly speaking, banking fraud in Nigeria is both inside and outside related. The inside related fraud comprises outright selling of customers’ deposits, authorising loan facilities, forgery and several other kinds of unhealthy and criminal practices.”

To address these challenges, Olukoyode advocated stringent measures, including monthly reconciliation of accounts in line with accounting standards. He urged the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) to intensify oversight of financial activities, conducting regular reviews and checks to deter fraudulent behavior.

In response, ACAEBIN Chairman Prince Akamadu affirmed the association’s commitment to implementing EFCC’s recommendations. He acknowledged the imperative of addressing foreign exchange (FX) challenges, a focal point of the retreat. Akamadu challenged industry stakeholders to introspect and explore avenues for bolstering regulatory compliance and combating financial crimes.

“That is part of the reason why we are having this retreat, to ask ourselves, to do an introspection and ask ourselves, given our position in the banking industry, or the executives of banks in Nigeria, are we doing enough?

“Have we done enough? What more can we do to help in sanitising the system? Are there things the banks could do to help in sanitising the FX in this country?”

“By the end of this retreat, we are expected to come up with a communique and we hope to address some of the issues, one way or the other, that will address the role of banks in FX challenges in this industry,”

Highlighting the banking industry’s efforts in implementing Know Your Customer (KYC) mechanisms, Akamadu assured that measures were underway to identify and plug loopholes contributing to fraudulent activities. He pledged the association’s unwavering dedication to addressing EFCC’s concerns and expressed optimism for tangible progress in the fight against financial crimes.

In conclusion, the discourse underscored the urgency of fortifying regulatory frameworks and enhancing collaboration among industry stakeholders to safeguard Nigeria’s financial ecosystem against illicit activities.

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