That is why banks are reluctant to publish the names of debtors, and when published, nothing concrete happens in terms of settling the debt. Of course, non-payment of debt is a fraudulent act in itself but it was not so treated in the ongoing discussions by the House of Representatives.
Fraud is a daily recurring word in every daily newspaper in Nigeria. A Nigerian newspaper seems incomplete without a report on fraud or fraudulent activity in public or private enterprises. It is so common that, without deliberate monitoring, you may not even notice you have just read about it. Thus, it has become a way of life. I was in search of another word to go with ‘bank’ in the title of this piece to attract attention but could not find a more appropriate word. Attaching fraud to banks might attract the required attention, but banks themselves are closely knit with fraud, given what havoc they have rendered on some individuals or enterprises. I, therefore, thought that if I doubled the two words – fraud and bank – it might just be more appealing to readers.
Fraud does not offend the sensibilities of many Nigerians anymore because it is like a national toga and Nigerian banks are part of the environment. To behave differently is to be ‘un-Nigerian.’ Or, how do you explain billions of naira spent on the refineries’ repairs yearly, including 2021 without positive results and nobody has been sent to jail or being probed on how such funds did go into the corruption drain pipe? How does the Federal Government of this country insist arrogantly on spending N3 trillion on fuel subsidy in 2022, even when there are options to look at how domestic production of fuel could save the country more than half of the amount; just because some people feel they must spend or benefit from spending the money? To expect stakeholders in the Nigerian banks to behave differently is to treat them as the saints that they should be but are not.
Bad debt and fraud in banks have always been part of the banking problems and have both grounded some banks globally. Actually, the link between bad debt and fraud is thin. Many underhand businesses that already compromise repayment of loans would have taken place before loans deals were concluded. That is why banks are reluctant to publish the names of debtors, and when published, nothing concrete happens in terms of settling the debt. Of course, non-payment of debt is a fraudulent act in itself but it was not so treated in the ongoing discussions by the House of Representatives.
The Bank Employee etc (Declaration of Assets) Act, Cap. B1, Laws of the Federation of Nigeria 2004, had prescribed a 10-year jail term in addition to forfeiture of assets for bank staff found to be involved in fraud. The House of Representatives is now recommending that the jail term be increased to 20 years in addition to forfeiture of assets. The bill has passed the second reading. The area of interest here is Section 7(2) of the Act, which states inter alia ‘Any employee guilty of an offence under the section shall, on conviction, be sentenced to imprisonment for twenty years and shall, in addition, forfeit the excess asset or its equivalent in money to the Federal Government.” Honourable Francis Waive (Ughelli North/South/Udu), who led the debate on the bill acknowledged the challenges posed by internet fraud, including yahoo boys’ activities, and their effects on banking. He hoped that the amendment will not only help improve the data bank of the banks but, importantly, serve as a deterrent to other staff and reduce the surge in nefarious activities. There is supposed to be simultaneous punishment for customers too.
It is no news that bank staff commit fraud and do go to jail. Since the introduction of the Act, now being amended, in 2004, many bank staff have gone to jail on the basis of it, and that ought to have deterred other ones, but not so. Hence the amendment. Will this stop fraud in banks? It will not. We have to investigate what is fueling the action and tackle the root headlong with a view to reducing, if we cannot eliminate, fraud. We need to understand that fraud in banks is also fueled by banks engaging in fraudulent acts against its staff and customers.
Most young staff we see in the banking hall are casual staff. These young ones grow with the bank over time and are conscious of the fact that they can be thrown out of the banking business anytime and without adequate compensation. Many of these youths, who have put in over ten years, were from time to time sacked or relieved of their jobs unceremoniously. This has been the trend of events over the last 20 years. The issue of the dedication of staff is very important for the growth of the enterprise they work for. Dedication itself is hinged on a number of factors, including job security and staff welfare.
Casual staff have no job security and they would be concerned about how to secure themselves against an uncertain future. In a bank setting, where their daily task is dealing with funds, the first idea is how to secure their future with such funds. This is a major source of increasing fraudulent activities in the banks. The banking management has effectively discouraged the activities of labour unions in the banking system so that staff would have no voice to fight for their rights and can be treated in a use-and-dump manner. The House of Representatives will have to look into this unholy attitude of worker casualisation to protect the workers, the banks and the customers.
The fraudulent activities of the banks towards customers also need attention just as customers fraudulent acts on the banking system. The House will have to investigate why banks should be imposing charges on customers on virtually all transactions. The banks are aware that their services on e-transactions are not near perfect but willfully play games with customers. Hitherto and ordinarily, customers were allowed to withdraw up to N20,000 from the ATM machines owned by other banks but most of them now allow withdrawals of only N10,000 so that the customer can get to the mandatory three withdrawals from the other machine and start paying penalty, which is likely to be paid for the rest of the month because of inefficient internet provision or service provider.
One of the banks I use regularly always deduct charges for the transfer of funds to another person’s account with the same bank such that I have to suspend using it as my main business account. Sometimes a bank would deduct card maintenance charges, even when you did not use the account for a month. Some other times, you lose your card in the ATM machine or there are multiple deductions, either may take you days to recover, if you do not have to eventually forgo your money. You can also imagine receiving embarrassingly smelly money from the ATM, yet one finds crisp notes with currency hawkers at parties! Some banks would even send you birthday wishes on wrong dates for whatever reason you may never know.
What is the House of Representatives take on all those big men, who have been found defrauding banks, causing huge bad debts that do put some banks in distress? Such people brought down the defunct National Bank, like many other banks in that category, in the 1990s. Some names were published but we never knew what punishment they faced except that some of them contested elections in later years and won. Some names have been published recently and nothing seems to be happening beyond the publication of the names. I suspect that they are going to contest the next elections and win. So, the compromise to defraud is not just coming from within the banking system but also from outside.
Why would such acts not embolden a young man or woman, who has worked with good qualifications in a bank for over 10 years as casual labour, unsure of when he or she will be thrown into the job market, to take advantage of the lapses to engage in fraud. While the House is trying to prevent fraud in banks, it should also prevent banks from engaging in fraudulent practices. The banks are supposed to be embodiments of truth, trust and reliability. The bankers have to search themselves for restitution; the Chartered Institute of Bankers of Nigeria has the onerous task of cleansing this odious table while the Central Bank of Nigeria should return to central banking instead of the present retail banking and launching cassava or rice pyramid.
Sheriffdeen Tella
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