Thieving Bank MDs, Directors Risk 20-Year Jail Term

By Fola James

Thieving managing directors, top management staff and other bank employees will no longer escape with a slap on the wrist punishment, if the House of Representatives passes the current amendment bill before it into law. The new bill seeks to amend the Bank Employees (Declaration of Assets) Act 2004 which prescribes 10 years jail term for offenders.

Last year, Okey Nwosu, the former managing director of Defunct FinBank and three other former directors were sentenced to just three years jail term after  stealing N10.9 billion from the bank.

Also in June same year, a Lagos High court jailed a former Managing Director of defunct Bank PHB Francis Atuche for six years for stealing over N25 billion from the bank.

But the new amendment prescribes 20 years jail term and forfeiture of proceeds of fraud as punishment for any thieving bank employee and management staff.

Close watchers of the industry insist that the amendment is timely, particularly now that bank fraud is rising at an alarming rate in the country.

The situation, Industry watchers insist has become so bad that banks management sometimes cover up for thieving staff in order not to bring their banks to disrepute, whereas some banks have lost the trust of many observant customers.

The amendment bill, sponsored by Francis Waive, when passed by the legislature will likely reduce the incidences of fraud in the banking and financial sector, experts say.

Section 7 (1) of the existing Act states that “it shall be an offence for an employee of a bank to own assets in excess of his legitimate, known and provable income and assets”, while section 7 (2) states that a bank employee found guilty of the offence in subsection 1 “shall on conviction be liable to imprisonment for ten years and shall, in addition, forfeit the excess assets or its equivalent in money to the federal government”. But speaking in the Chamber on Wednesday Waive, said the existing law needed to be amended in such a way that offenders of fraud will be brough to account and severely sanctioned for their crimes.

According to him, banking fraud “has consistently been on the rise,” noting that “it is also true that most of the online fraud carried out is perpetuated with bank staff as collaborators, and in some cases involving staff who is no longer in the employment of the bank.

“There are currently a lot of reported cases of fraudulent activities by bank employees which include fraudulent transfers/withdrawals, cash suppression, unauthorised credits and fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, burglary and presentation of forged or stolen cheques.

“Research shows that some bank staff, aside from documentary fraud, sometimes stage-manage robbery or connive with outsiders to perpetrate such act.

“On further research, it has also been revealed in police investigations on the activities of corrupt bank staff that the fraudsters scout for obituaries of well-to-do members of the public, use bank employees to determine the deceased’s account balance, clone their SIM cards for online transfer, and all sorts.

“The amendment sought on section 7 of the Act is therefore necessary to increase the punishment accrued to a guilty bank employee from a lesser punishment of 10 years imprisonment to a higher punishment of 20 years, to serve as a deterrent to all bank staff from such acts.”

According to the Nigeria Inter-Bank Settlement System Plc report released in February 2021, banks lost a whopping N5 billion to various fraudulent practices within nine months in 2020.The details of the report indicate that eight commercial banks lost a total of N1.9 billion to fraud.

The banks are Zenith Bank Plc, Access Bank Plc, Union Bank of Nigeria Plc, Guaranty Trust Bank, Wema Bank Plc, Fidelity Bank Plc, Polaris Bank Plc and Sterling Bank Plc. The report further indicated that Polaris and Zenith incurred the biggest losses as a result of fraud, after losing N938 million and N360 million respectively.

Polaris, according to the report recorded 134 cases of fraud in 2020. The breakdown includes 43 Automated Teller Machine fraud, three Internet bank fraud cases, 46 mobile fraud cases, three impersonation fraud cases, one theft case, 25 outright theft and 113 general fraud cases.