Insider abuse threat to banking system – NDIC

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday said there was an urgent need to tame insider abuses and financial malpractices in banks and banking operations as the menace, if not tackled, may erode public confidence in the banking system. This is just as the Economic and Financial Crimes Commission (EFCC) said it had identified […]

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday said there was an urgent need to tame insider abuses and financial malpractices in banks and banking operations as the menace, if not tackled, may erode public confidence in the banking system.

This is just as the Economic and Financial Crimes Commission (EFCC) said it had identified a surge in fraud due to the “malicious insiders presented as past and current employees of financial institutions or trusted partners.”

Speaking in Lagos on Thursday at the 2024 capacity building workshop for law enforcement agencies, the Managing Director and Chief Executive Officer of NDIC, Bello Hassan, said insider abuses and financial malpractices remained a major cause of bank failure.

The two-day event with the theme “Inter – Agency in the fight against financial malpractices in banks and other financial institutions in Nigeria,” attracted law enforcement agents across the country.

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Hassan, who was represented by the Director of Communication and Public Affairs, Nuhu Bashir, said the corporation has over the years taken the fight against the menace seriously. 

Bashir said the NDIC had been consistent since 2012 in organising the workshop to sharpen the skills of law enforcement operatives and officers from regulatory agencies that are involved in the investigation and prosecution of bank directors, managers and staff of banks involved in malpractices and insider abuses that might have led to the collapse of their banks or financial institutions.

He said, “The authorities are becoming more proactive with policies and examinations/investigations to ensure that the banks/financial institutions strengthen their risk management practices to prevent loss of funds and maintain depositors’ confidence in the banking system.”

EFCC Chairman, Ola Olukoyede, said the commission hinted that it arraigned an employee of a new-generation bank for abusing privileges by altering customers’ records exposing the bank to a loss of N2,737,784,800.00.

The EFCC chairman who was represented by the Lagos Zonal Commander, Michael Wetkas, noted that collaborative insider fraud had also assumed an alarming dimension as conspirators work together to beat the internal control systems.

He equally expressed worry that the “Point of Sale operators have also been observed to be a convenient channel for dirty money to be removed from the financial system.”