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CBN Intensifies its Campaign Against Bank Fraud.
CBN Intensifies its Campaign Against Bank Fraud.
The Central Bank of Nigeria has redoubled efforts to trace bank transactions in order to stop systemic fraud, which has increased over the past five years and cost Nigerians billions of naira.
The Central Bank of Nigeria (CBN) and local banks have been working to ensure that instances of bank fraud are reduced or eliminated through the use of new technologies in this area.
Last week, the CBN said that 7,552 bank verification numbers (BVN) had been flagged and put on watchlist as a result of fraudulent transactions.
In the CBN Financial Stability June 2022 report published in December 2022, at least 6,047 bank verification numbers of bank customers have been placed under the Central Bank of Nigeria watch list for fraudulent transactions.
The report also noted that 11,871 BVNs have been listed as deceased this year.
The report disclosed that the apex bank conducted an assessment of 28 banks and the Nigerian Interbank Settlement System to ascertain compliance with the Regulatory Framework for BVN Operations and Watch List for the Nigerian Banking Industry in the review period.
It was noted that the assessment revealed some infractions, and regulatory actions were taken.
The report further noted that there were 2.72 million BVNs enrolled in the first half of this year, bringing the total number of enrolled BVNs to 54.65 million.
In the report, it was also stated that the number of BVN-linked accounts was 130.57 million out of 148.46 million active accounts.
The report read in part, “Also, 2,722,518 BVNs were enrolled, bringing total BVN enrollment to 54,651,086, reflecting an increase of 5.24 percent over 51,928,568 enrolments at end-December 2021.”
“The number of accounts linked with BVNs was 130,569,656 out of 148,462,947 active customer accounts, while the number of watch-listed BVNs associated with fraud and deceased persons stood at 6,047 and 11,871, respectively.”
Based on the report, the total number of watch-listed BVNs for fraud rose by 13.09 percent from 5,347 in December 2021 to 6,047 in June 2022.
It was reported recently that four Nigerian deposit money banks lost a total of N1.77 billion to fraudulent activities involving the banks’ employees and consumers in 2021.
Speaking at the 34th edition of the Finance Correspondents and Business Editors’ seminar in Calabar, Cross River State, where stakeholders converged to discuss the theme “Implementing a Robust Payment Architecture: Prospects, Opportunities, and Challenges,” the Director of Payment Systems Management, CBN, Musa Jimoh, disclosed that the centralization of the BVN has enabled the CBN to track fraudulent individuals and entities who have engaged in forgery, compromise, complicity, fraudulent duplicate enrollment, and any fraudulent infraction with and without monetary value.
Represented by Deputy Director, Payment Systems, Adefuye Adeyemi, he said: “Recent data with the CBN reveals that 7,552 BVN have been put on the watch list.”
Also speaking at the seminar, CBN Governor, Mr. Godwin Emefiele, noted that cyber threats and the activities of fraudsters have continued to threaten the resilience of the payment platforms, adding that the confidence of the public was impacted by these activities.
He, however, added that there are collaborative efforts between the CBN and other players in the industry to curtail the nefarious activities of these fraudsters.
He said: “In response to the challenges posed by cyber threats, the CBN has put the following initiatives in place: the Nigeria Electronic Fraud Forum (NeFF), payment card industry data security standard, the financial industry cybersecurity fusion center, and other initiatives against cybersecurity and fraud in Nigeria.
“With these initiatives in place, the CBN has demonstrated an irrevocable commitment to ensuring the stability and safety of the Nigerian payment system.
“Accordingly, we shall continue to deepen our oversight of the activities of operators in the payments system as well as ensure full compliance with regulations.” In this regard, examiners and supervisors would continue to ensure that services delivered by participants meet the required security standards.
“The bank will also continue to adopt a collaborative approach to achieve minimal cybersecurity threats in the payments system.” A holistic mechanism for addressing cybersecurity threats requires policy and operational actions by all stakeholders.
“As you are aware, effective January 2023, the Bank issued a Risk-Based Cyber-Security Framework and Guidelines for Other Financial Institutions to ensure their operational resilience in the face of cyber-security threats.”
Reactions
An Abuja-based economist, Cyril Ampka, said the CBN and the banks need to bring down cases of fraud in the banking system.
He said, “I think the banks and the CBN need to move faster than these fraudulent people. I will be glad to see collaboration between the CBN and other agencies like the Economic and Financial Crimes Commission and the Nigerian Financial Intelligence Unit”.
The Chief Executive Officer of the Center for the Promotion of Private Enterprise, Dr. Muda Yusuf, urged the CBN to introduce sanctions and eliminate policies that promote corruption.
He said, “I think what they can do is activate sanctions on anyone found wanting. Aside from the tracking, there must be evidence. And once there is evidence, they should close in on anyone they find. Cyberfraud is the biggest threat to the banking industry.
“The CBN should also refrain from policies that would encourage corruption. One of such policies is the foreign exchange policy. When you have multiple windows and a wide margin between the official rate and the parallel market, it creates a lot of corruption. That is something the CBN needs to look into”.