BY AUGUSTINE OMILO
As the search to end financial fraud in the country continues, the Central Bank of Nigeria, CBN recently released guidelines aimed at curbing the menace. According to the apex bank, the fraud losses skyrocketed by 603 per cent in the first quarter of 2025, with more than 12,000 cases recorded in just three months. The majority of the crimes involved Authorized Push Payment (APP) fraud, where victims are deceived into transferring money themselves through fake investment schemes, impersonation scams or romantic and emotional manipulations.
The proposed guidelines, amongst others, states that banks will be required to resolve fraud complaints and reimburse eligible customers within a maximum of 16 working days from the time a case is reported. And key provisions are that customers must report suspicious transactions within 72 hours with exceptions for illness, safety risks or system outages. It further states that banks must acknowledge the report and freeze traceable funds within 24 hours.
The banker to other banks further provides for investigations to be concluded within 14 working days and if the customer qualifies, refunds must be paid within 48 hours of the investigation’s conclusion. Also in the policy guidelines, the CBN notes that where multiple institutions are involved in the payment chain, the originating bank must notify others within 30 minutes of receiving the complaint.
Given the urgency of the need to curb fraud in the Nation’s banking system and by extension in her financial management, the recent decision by the CBN is not only apt, it also calls for dedication in its implementation.
Many policies of government along this line in the past cannot be said to have succeeded as government intended them to. For example, even when it was clearly stated that Automated Teller Machine (ATM) withdrawal limit shall be N100,000), commercial POS operators have been known to dispense as high as N1 million or more to individuals. Again, while the weekly cash withdrawal limit across all channels is N500,000), a glossary look at how some individuals spray money on occasions such as birthdays and funeral ceremonies show that many individual Nigerians splash more than this amount on celebrants during such events.
Banking frauds occur in Nigeria due mainly to ‘porous’ banking software and dubious collaboration between bank officials and perpetrators of frauds. People who withdraw bulk monies from bank customers’ bank accounts often succeed because banks’ software do not have enough security checks before on-line transactions are concluded. For example, before a debit alert is automatically sent to a customer, pre-debit notice message can be sent to an account holder’s telephone with a request to respond with a ‘y’ or ‘n’. And mute will mean rejection of transaction. Those who subscribe to this will indicate it in their mandate forms.
In the meantime, the requirement for recruiting personnel into the banking sector must not continue to be based on the possession of fantastic university degree pass grades. It must include thorough character investigations of intending bankers.
While ensuring the recruitment of competent Information technology staff, care must also be taken to ensure that the software used by banks is top notch. This can only be ascertained if all the systems analysis reports are taken into account during the negotiation for procuring computer programs that would drive banks’ activities.
It is not enough for the Central Bank of Nigeria to issue guidelines to banks on how to curb the menace of fraud. As the apex bank, it should also strengthen its supervisory roles over the activities of other banks. In fact, the CBN must be the first point of call when it comes to the registration of corporate organisations that want to run as banks. The recommendation of the CBN should form the basis for Corporate Affairs’ Commission to incorporate such companies.
Training and retraining of banks’ personnel should continue to attract the attention of banks and their management. This will ensure that workers in the industry are abreast with modern trends in the sector, especially the aspects involving systems integrity.
The interbank transaction modules of the institutions need further unification codes for seamless banking acts; just the same way all the customer account numbers have been made to have ten digit numbers in all banks.
Above all, agencies such as the Economic and Financial Crimes Commission, EFCC and the Independent Corrupt Practices and Related offences Commission, ICPC must equally continue to try hard at embracing the kinds of knowledge available to bankers. This will help to brighten their understanding of banking operations which will in turn make them more thorough in their investigations of banking fraud.
Additional banking fraudsters must not only be apprehended, but also prosecuted according to extant laws of Nigeria. Citizens of the country deserve to know about the status of all reported fraud cases so far.
However, any policy thrust emanating from the Central Bank can only be effective when properly subjected to the other related policies of the federal government. For instance, the non- implementation of the unexplained wealth law is a minus to the war against financial fraud in Nigeria.
