E-Financial
Bank Insiders Help Fraudsters Steal Billions
Despite multiple security checks in banks, incidents of fraud are on the increase, prompting the Central Bank of Nigeria (CBN) to raise alarm, blaming it on insiders.
A report by Weekly Trust takes a look at the disturbing trend.
According to Weekly Trust, since e-banking commenced some years ago, banking operations and services to customers have been made easier.
But despite the smoothness and comfort on offer, there are also setbacks and risks the banks and customers face from time to time. Investigations indicate a rise in fraudsters cashing in on modern technology to fleece unsuspecting depositors.
Weekly Trust spoke to a banker in one of the leading commercial banks in Nigeria, who craved anonymity, and he confirmed the rise of insider collaborators in fraud. He noted that the network of criminals is so strong that it is extremely difficult to pin down the culprits.
The source said the most elementary aspect of the fraud is wilful neglect of checking and confirmation of personal data and addresses of fresh bank customers who want to open new accounts.
“There is a policy called “Know Your Customer” (KYC). It is expected that any person who comes to open a new bank account is only granted that opportunity upon confirmation by his account officer the accuracy of the information he has rendered in his personal data form, especially his office and residential address. But in most cases, customers who are fraudsters who come to open accounts and have connivers within, give fake information,” he said.
“Without necessary confirmation, the conniver goes ahead to open such accounts, which are used in defrauding people. In effect, when fraud happens, the suspects cannot be located with the addresses in personal data forms. He stands a better chance of evading prosecution at this point,” the source added.
Another source disclosed that would-be fraudsters who have insiders approach the bank with account numbers and other details of persons they know are flush with cash.
“They come and pretend that they have forgotten the signature they signed for the account in question. They request that the manifest be opened for them to see their signature and remember. Once the insider opens the manifest, the fraudster could also request to snap the signature with his phone, under the pretext that he doesn’t want to forget it again. These are questionable demands, but the insider grants it because they are in collaboration. Of course, we know there are expert forgers,” he explained.
In another case, a man who operated an account with a commercial bank (name withheld) with a heavy base in the North had N2.1 million withdrawn from his account by fraudsters.
The man, who pleaded anonymity, said he had N3.2 million in his account and went to withdraw N200,000.
He had not withdrawn cash for a while, noting that the transaction was done. But since his GSM number which receives SMS alerts was inoperative, he requested for written balance, only to discover that N2.1 million had been withdrawn.
“I raised alarm and upon investigation by the management of the bank, it was discovered that someone forged my bank documents, impersonated me with an identity card and also cloned my GSM line. The money was transferred into an account in Abuja, but I couldn’t get the alert. The bank later discovered I never made the transfer or withdrawals and refunded my money, but it suspended the cashier who authorized the payment,” the victim said.
Weekly Trust gathered that fraud within the banking sector manifests at different levels and it is systemic in nature.
A source said bank staff would not ordinarily open doors for a thief to come in and steal money from the vault.
He said what obtains is that corrupt bank staff carefully arrange for a lapse to occur, so they can explore that window.
Also, a recently retired senior manager with one of the old generation banks who prefers to be identified simply as Mustapha said experience tells him it is almost impossible to hit any bank without internal assistance.
“One of the common examples of fraud amongst the top officers of banks is in approving fraudulent loans for their proxies. They register companies in the name of their friends or families, put documents together and approve huge sums to these companies which largely exist only on paper.”
Then they go ahead to approve all manner of concessions and waivers, practically giving themselves these monies, robbing the bank of legitimate income. Billions of naira get stolen this way, accumulatively.
Investigation also revealed that even where these companies truly exist with verifiable business on ground, they cannot access bank loans on record time without reaching a compromise with the bank officials on what percentage they will get as kick-backs.
“In doing so, even where there are danger signals to warrant reconsideration, they will be overlooked and approval will be given,” another source added.
A chartered accountant and auditor, Mr. Sunday Enenche said a good number of the high-profile fraud cases are executed by top management staff of banks, with bank management using their branches to warehouse large sums for politicians and other highly placed individuals in the society.
According to him, these monies are not captured in the books of the banks because they could raise suspicion by the Economic and Financial Crimes Commission (EFCC), saying it denies the bank of income.
“With the cooperation and understanding of the bank management, they move these sums around from time to time to avoid Central Bank of Nigeria’s (CBN) unscheduled inspection. You will rarely see the real owners of these monies in the banking hall, as they have their agents who are well-known by the banks and can access these monies at any time of the day,” he added.
Worried by the increasing cases of fraud, the CBN on January 19 through a circular issued a directive urging banks to take steps to curb the trend.
The directive, signed by Mr. Dipo Fatokun, Director, Banking and Payment System Department, also stated that the abuses center on identity theft and abuse of authorization.
The apex bank therefore announced measures to check such and gave a December 31, 2015 time limit for compliance by all banks or a N50,000 fine daily after the expiration of the deadline.
Experts argue that what you get with the lower ranks of bank officials is not frequent and they also come in various forms because the opening is not always there.
They insist that in some cases, double deductions occur on same amount on an account where the customer has made same type of deductions, by not crediting the customer’s account with deposits, yet issuing a teller to the customer.
They could also connive with robbers to hit the banks premises or bullion vans if they notice that guards are loose on certain days or times. There are also cases of signature forgery and altered cheques.
But Mustapha cautioned that whereas banks keep updating their fraud counter-mechanisms, a lot more depend on the integrity and prudence of the staff to succeed.
The banks may need to also reconsider the current practice of contract workers who handle transactions far above their pay grades.
“You cannot employ a graduate, place him on contract and pay him less than 50 percent of what a similar graduate in the same system earns, who is not on contract. Temptation will be there.”
Central Bank of Nigeria (CBN) has launched a new digital platform to track every foreign exchange transaction involving Bureaux De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of the country’s retail forex market.
In an operational guidance issued on July 15 to authorised dealer banks and licensed BDCs, the apex bank introduced the FX BDC Purchase Tracker (FXBT), a centralised electronic portal designed to monitor foreign exchange purchases by BDCs from the point of request through approval, settlement and eventual sale.
The CBN said the portal will require BDCs to upload real-time or same-day data on all FX purchases made through the Nigerian Foreign Exchange Market (NFEM), giving the regulator transaction-level visibility across the retail FX market.
According to the bank, the platform is designed to prevent abuse by making it easier to detect operators attempting to exceed the weekly purchase limit of $150,000, obtain allocations from multiple banks or divert foreign exchange outside approved channels.
The launch of the tracker builds on the CBN’s February policy that restored direct access for licensed BDCs to purchase foreign exchange from authorised dealer banks through the NFEM. While that policy improved access to official FX, the new platform provides the digital infrastructure to monitor how the funds are used.
Under the new framework, authorised dealer banks must conduct comprehensive Know-Your-Customer (KYC) and customer due diligence checks before selling foreign exchange to any BDC.
The new guideline also says banks must verify beneficial ownership information, retain incorporation documents and carry out enhanced due diligence for higher-risk operators.
Any BDC that fails these checks will not be allowed to access official foreign exchange.
The guidance also requires banks to acknowledge BDC purchase requests submitted through the FXBT portal within two business hours and immediately notify operators whether their requests have been approved or rejected.
To discourage speculation, the CBN directed that any forex purchased through the NFEM but left unused must be sold back into the market within 24 hours after the expiration of the utilisation period.
BDCs are also required to disclose any previously unused balances when submitting fresh requests.
In addition, all foreign exchange transactions between banks, BDCs and customers must be settled through registered accounts with licensed financial institutions.
Third-party transactions are prohibited, and any transfer outside a BDC’s registered settlement account will be treated as a regulatory violation.
The apex bank also said all authorised dealer banks and licensed BDCs are expected to comply with the new regulatory guidance and operational procedures with immediate effect.
President Bola Tinubu has signed the Presidential Executive Order on Virtual Assets Coordination, 2026, introducing a coordinated framework to regulate Nigeria’s fast-growing virtual assets sector, combat fraud and strengthen oversight without creating a new regulatory agency.
The Executive Order, which took immediate effect, establishes a Virtual Asset Council to harmonise the activities of financial, revenue and capital market regulators while promoting responsible innovation in the digital economy.
According to a statement issued on Friday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, the order was signed pursuant to Section 5 of the 1999 Constitution to address growing regulatory gaps as virtual assets increasingly blur the boundaries between currencies, commodities, securities and payment systems.
The Presidency said the fragmented regulatory landscape had exposed Nigeria to risks including money laundering, terrorism financing, cybercrime, data privacy breaches, fraud and significant revenue losses, with fraudulent operators exploiting loopholes to defraud unsuspecting investors.
Under the new framework, the Central Bank of Nigeria (CBN) will chair the Virtual Asset Council, while the Nigeria Revenue Service (NRS) and the Securities and Exchange Commission (SEC) will serve as vice-chairmen. Other members include the Nigerian Financial Intelligence Unit (NFIU) and the Office of the National Security Adviser (ONSA).
The Council will coordinate policy, strengthen collaboration among regulators and work with the Attorney-General of the Federation to develop a harmonised legal framework that aligns virtual asset regulation with Nigeria’s economic, security and social priorities.
The Executive Order also establishes a Virtual Asset Office, domiciled at the CBN, to serve as the Council’s operational secretariat. The office will coordinate information sharing, applications and reporting among participating agencies through an integrated supervisory technology platform while allowing each institution to retain control over its data.
The Presidency stressed that the order does not establish a new regulator or transfer statutory powers from existing agencies. Instead, it creates a coordination mechanism under which regulatory responsibilities will depend on the nature of the virtual asset or activity involved.
Under the arrangement, the SEC will continue to regulate virtual assets classified as securities, while the CBN will oversee payment, settlement, custody and other non-security virtual asset services. The Council will resolve jurisdictional disputes where responsibilities overlap.
As part of the reforms, the CBN will launch a regulatory sandbox that will allow eligible firms to test virtual asset products and blockchain-based solutions under close regulatory supervision before they are introduced into the wider market.
Similarly, the Nigeria Revenue Service will issue a dedicated tax policy for the virtual assets sector to clarify tax obligations, improve voluntary compliance and ensure the rapidly expanding industry contributes fairly to government revenue.
The Federal Government is also finalising a comprehensive Virtual Assets White Paper, which will outline Nigeria’s long-term policy direction for the sector.
President Tinubu directed the newly established Council to produce a Harmonised Implementation Framework within 30 days to facilitate the immediate implementation of the Executive Order and strengthen confidence in Nigeria’s digital economy.
World Bank has said that despite nearly three years of economic reforms by the federal government, about 79 per cent of Nigerians remain poor or vulnerable to falling into poverty.
The bank stated this in its newly approved Country Partnership Framework for Nigeria, covering 2026 to 2032, and its accompanying Streamlined Country Diagnostic.
The report which highlighted the country’s deepening social and economic challenges, indicated that while recent macroeconomic reforms have helped stabilise the economy and restore investor confidence, the benefits have yet to translate into meaningful improvements in living standards for most Nigerians.
The World Bank noted that the seven-year strategy seeks to support Nigeria’s ambition to create more and better jobs through private-sector-led growth while accelerating poverty reduction.
According to the Streamlined Country Diagnostic document, “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”
The World Bank pointed out that Nigeria’s economic performance over the past decade had been constrained by structural rigidities, policy missteps, dependence on crude oil, and repeated external shocks, leaving millions trapped in poverty.
It stated that about 139 million Nigerians currently live below the national poverty line, with poverty concentrated largely in the northern part of the country.
The report also noted that more than 86 million Nigerians remain without electricity, while three to four million young people enter the labour market every year with limited employment opportunities.
It added that sustaining macro-fiscal and structural reforms would be critical to reducing inflation, expanding fiscal space and ensuring that recent economic stabilisation translates into improved living standards.
According to the report, the reforms have begun to improve macroeconomic indicators.
Economic growth increased from 3.5 per cent in the first half of 2024 to 3.9 per cent during the corresponding period of 2025, foreign reserves exceeded $42bn, fiscal deficits narrowed, and investor confidence strengthened.
However, it warned that high inflation continues to undermine household incomes. The report stated, “High inflation, though declining, continues to erode real incomes, particularly for the poor. Social protection efforts to support the most vulnerable have been slow and uneven in their rollout.”
The World Bank added that although the reforms helped Nigeria avoid a more severe economic crisis, institutional weaknesses, weak policy coordination, and inadequate budget transparency continue to pose significant risks.
It warned that sustained reform implementation, backed by deeper structural measures, would be required to improve Nigeria’s medium-term economic outlook.
Under the new Country Partnership Framework, the World Bank said job creation would serve as the primary pathway for reducing poverty.
The report explained that international experience from countries such as India, Indonesia, and China shows that moving people into productive employment remains the most effective tool for reducing poverty.
To achieve this, the framework will prioritise labour-intensive sectors, particularly agriculture and micro, small and medium enterprises, while addressing structural deficiencies in electricity, digital infrastructure, education and healthcare.
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