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Reps mull 20-year jail term for bank employees involved in fraud

Reps mull 20-year jail term for bank employees involved in fraud
February 02
18:17 2022

A bill proposing a 20-year jail term for bank employees involved in fraud has passed second reading at the house of representatives. 

The bill seeks to amend sections 5 and 7 of the Bank Employees (Declaration of Assets) Act 2004.

Section 7 (1) of the 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 the new bill sponsored by Francis Waive, a Peoples Democratic Party (PDP) lawmaker from Delta state, wants the jail term increased to 20 years, while the offence should include other fraudulent activities committed by bank employees.

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Leading the debate on the bill during plenary session on Wednesday, Waive said the amendment is necessary to curb the escalating fraud offences committed by bank staff.

“It is no longer news that computer fraud, which includes hacking of people’s accounts, forms part of the majority of the fraud perpetrated in our country in recent times and has consistently been on the rise,” he said.

“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.

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“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.”

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Contributing to the motion, Gagdi Yusuf, a legislator from Plateau, said transactions between bank officials and customers are based on trust but the trust has been taken for granted.

“In a different circumstance, bank officials suffocate and frustrate their customers for no reason because there is no framework that brings those officials to order,” he said.

He said the jail term should be more than 20 years, adding that sometimes, bank officials conspire with fraudsters to take money from customers’ accounts.

Also speaking, Nkem Abonta, a lawmaker from Abia, said bank employees should be defined to include board of directors to address illicit transactions.

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“We have seen directors taking loans without collateral. Bank owners, anybody who is related to the bank, should be deemed to be an employee of the bank so that the directors of the bank will not be richer than the deposit owners,” he said.

“If you look at it, for example, most banks that failed, the directors will simply form another bank and then they move on and then Nigeria Deposit Insurance Corporation (NDIC) will give people N500,000.”

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In his contribution, Toby Okechukwu, deputy minority leader of the house, said banks should be liable for the fraud suffered by a customer.

“I think there should be a vicarious responsibility on the institution (bank) if it fails or neglect or ignores to take proper data of employees who commit an offence,” he said.

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“There must be restitution. An institution that accommodates somebody who can occasion fraud on a bank customer — the bank itself — should be liable to putting back the victims in a state he was before that fraud.”

In his remarks, Femi Gbajabiamila, speaker of the house, said the contributions of the lawmakers should be considered at the committee level.

He subsequently referred the bill to the committee on banking and currency for further legislative work.



This story is published in partnership with Report for the World, a global service program that supports local public interest journalism.

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