…Stress need for urgent regulatory intervention
Worried over reported cases of fraud in the banking sector, the Nigeria Deposit Insurance Corporation (NDIC) has stressed the need for urgent regulatory intervention in order to achieve much financial discipline in the financial sector.
NDIC maintained that the urgent regulatory intervention will help in consolidating the gains of the various reforms in the nation’s banking sector.
NDIC in its 2014 annual report and statement of account had reported 10, 612 of fraud cases within the year under review as against 3,786 cases in 2013, which showed an increase of 183 per cent. The amount involved in 2013 was N21.80 billion as against N25.61 billion which was a 17.5 per cent increase with expected loss increase from N5.76 billion in 2013 to N6.19 billion in 2014.
While speaking at the 2015 workshop for Business Editors and Finance Correspondent Association of Nigeria (FICAN), Managing Director of NDIC, Alhaji Umaru Ibrahim said, it is worrisome to note that the banking system had continued to record very high incidences of fraud and forgeries in recent years.
The workshop which was held in Ilorin, Kwara State was themed ‘Developments in E-Banking, Mobile Payments System and Deposit Insurance in Nigeria.
He said,” these developments however, require the general understanding, acceptance and active participation of all stakeholders to realize the objectives of financial inclusion through effective banking policies. What is more, the extent to which the general public is involved in this socio-economic re-engineering depends largely on how the media plays its role of informing and educating the populace in order to achieve financial system stability.
“The continuous collaboration between the media and regulators of the financial system, particularly the NDIC, is very remarkable and should be sustained. It is therefore, imperative for the media not only to understand the various financial services available in the formal banking system and the safety net being provided by the regulatory and supervisory authorities but also the need to enlighten members of the public on the benefits and how to access the various financial service,” he said.
According to him, sections 35 and 35 of the NDIC Act 2006 mandate all deposit-taking financial institutions to send returns of frauds, forgeries and other financial malpractices to the corporation on monthly basis.
“They are also expected to notify the corporation on any member of staff that has been dismissed or have their appointments terminated or advised to resign or retire on grounds of financial infractions,” he added.
While listing the visible challenges confronting the entire e-banking, mobile payments and deposit insurance, Ibrahim said they include inadequate and poor infrastructure arising from lack of constant power supply, poor linkage access roads to remote locations and inadequate telecom services in most locations and high overhead cost on the part of operators relying on alternative power source to ensure effective and efficient service delivery.