Beige Bank case: Any customer whose account is debited receives alert - 6th defense witness to Court

The sixth defence witness in the ongoing trial of the founder of the defunct Beige Bank has informed the High Court in Accra that customers receive automatic debit alert notifications when their accounts are debited.

Herod Mensah, the former Branch Chief Executive of Tema Community (1), also stated that the customer’s first point of contact for complaints would be the branch manager or Relationship Manager.

Mr. Mensah, in his Witness Statement adopted by the Court, presided over by Justice Afia Serwah Asare-Botwe, asserted that it was impossible for customers’ funds to be moved without them receiving an alert notification.

“If transactions are posted into the account of any customer and these transactions turn out not to have been authorized by the customer, that customer would definitely lodge a complaint at the bank,” he explained.

“This is because the customer would have received an alert on their phone about the transactions or would have seen them in their bank statement. This is standard practice, and banks actually encourage their customers to bring any anomalies they detect on their statements to the bank's attention,” the Witness told the Court.

“I must add that throughout my experience in banking, there has never been an occasion where a customer would refuse or neglect to lodge a complaint when there has been an unauthorized transaction on their account. Indeed, that would be unusual behavior from any such affected customer,” the former Branch Chief Executive stated.

He also made it clear that no bank officer has the capacity to move funds from a customer's account without the express consent of the customer.

“For that to happen, the officer may either be a signatory to the account or they may have forged the signature of that customer. From my experience as a BCE, such a matter would have been reported to the branch immediately after it happened because the customer would definitely receive an SMS alert regarding the transaction or they would have seen the same on their bank statements,” he said.

Mr. Nyinaku, the founder and Chief Executive Officer of the defunct bank, has been charged with allegedly stealing GH¢2.1 billion of depositors' money from the bank. He has pleaded not guilty to 43 charges, including stealing, fraudulent breach of trust, and money laundering, and has been granted bail.

Movements of Funds

Although the Witness told the Court that he was not in a position to speak to transactions involving the movement of funds from the current accounts of Beige Capital Assets Management (BCAM) and subsequent transactions, he has personal knowledge of the movement of funds.

“I can speak to the issue of the movement of funds from the current accounts of individual customers of the bank. As BCE of the bank, we were the officials responsible for directly engaging with the bank's customers. Therefore, as the frontline officials of the bank, any issue that was an anomaly would first be reported to and known by the branch. When this is known to or brought to the attention of the branch, we take steps to rectify it,” he stated.

“When the branch is unable to rectify it, the matter is then escalated to another level for further action,” Mr. Mensah added.

“To properly explain the facts to which I am privy and the role I played in them, it is important to explain how the internal structures of the bank were organized. I have explained how the bank was structured for the court to appreciate the fundamental fact that the point of contact between the customer and the bank is at the branch level. At the branch level, the customer may deal with tellers, relationship officers, or operations officers, all of whom report to the BCE,” he told the Court.

Hierarchy of Structure

He continued, “Between the BCE and the CEO, there are many layers in the hierarchy of the leadership structure at the bank, so much so that a BCE would hardly ever engage with the CEO. Throughout the time I worked with the bank, the only times I met or engaged with the CEO were at monthly performance review meetings where he would address all BCEs or when he paid a courtesy visit to my branch.

For ease of management, the bank is structured into several departments, each performing specific functions. All of these departments had a head at the management level who bears responsibility for and supervises matters that occur at the branch and which concern functions within their department at the branch level. Some of the departments included finance, admin, banking operations, marketing, and compliance, among others, and the most senior officials responsible for these functions were the Chief Finance Officer (CFO), Head of Admin, Chief Operations Officer (COO), Chief Marketing Officer (CMO), and Chief Compliance Officer (CCO), respectively.

For purposes of clarity, I will explain the functions of the various departments listed above.

As can be inferred from the structures explained in the preceding paragraphs, there is hardly any contact between customers of the bank and the CEO except for courtesy visits. Where a customer wants to do business, the contact place or person with whom such business would be transacted would be at a branch or with an official of a branch.

Customers' Instructions Processes

He told the court that, in banking practice, bank accounts are operated by mandates. In the context of banking, mandates are the persons who have the right to issue instructions concerning any account.

“In every bank, when an account is opened for a customer, the bank requires the customer to provide specimen signatures of the officials who would act as mandates to the account. Whether it is a personal or corporate account, there has to be a mandate. Account holders are therefore made to sign their specimen signatures, which are scanned and uploaded into the bank's system.

The reason why the bank requests these specimen signatures is that any transaction advice received by the bank must be signed by the signatories to the accounts. Besides the specimen signature, the bank also requests photographs of the signatories to the account.

Thus, when an instruction is received from an account holder, the operations team checks to ensure that the signature on the instrument bearing the instruction matches the specimen signatures of the account holder. This is a mandatory requirement that must be satisfied before the transaction can be processed.

Because banks have several branches and these branches are connected, customers of the bank have the luxury of going to any branch of the bank to transact their business. At that branch, the teller or operations officer is not likely to know the customer in person, especially where the account is not domiciled at the branch. The situation is even worse if the transaction advice is not presented by the customer themselves, which is very common practice.

Thus, in all situations, what the teller at the bank relies on to process the transaction is the signature on the transaction advice. The teller looks at the transaction advice and compares the signature with the specimen signature in the bank's system to confirm if the features agree,” he explained.

“As I have earlier explained, the department within the bank that processes transactions relating to customers' accounts is the banking operations department. When I say ‘process’ in this context, I mean the effecting of entries into the accounts of customers, which entries would appear on the bank statements of the affected customers.

At the branch level, the officials who represent or act as banking operations officers are the tellers and Operations Team Leaders (OTLs).

Instructions from customers come in several forms. It could be in the form of a cheque, a transfer advice, or even an email in the case of customers who use e-banking services. The instructions may be presented to the bank by the customers themselves, their assigns, or through their relationship officers. Whichever form the instruction is issued, it must necessarily be signed by the account holder, and the signature must match the specimen signature in the bank's system,” the Witness said.

“When the branch receives an instruction from a customer, these officers (i.e., the teller and OTL) first perform processes to verify the validity of the instruction. When these officers are satisfied with the validity of the instruction, then they proceed to make entries in the banking system/software to effect the transaction,” he added.