BoG alarmed by rising fraud involving bank staff

The Bank of Ghana has expressed worry over the rising incidence of fraud committed by banks’ staff.

In its 2019 Banking Industry Fraud Report, the central bank stated that while the overall number of fraud cases went up marginally, those committed by banks’ staff remained dominant.

The report, released on Wednesday, said the total number of cases reported were 2,295, with 1,667 of them committed by banks’ staff, either permanently employed or on contract.

“The alarming rate of involvement of bank staff in the perpetration of fraud in the banking sector calls for significant reforms in the engagement, remuneration and disengagement processes of employees and contractual staff of financial institutions,” the report stated.

According to the report, the dominant type of fraud committed by these staff—typically tellers, mobile bankers and other frontline staff—is the suppression of cash or deposits.

In 2019, the total value of fraud cases in this category amounted to GH¢5m, out of which GH¢4m was never recovered by the financial institutions involved.

Way forward

The reported also highlighted other types of fraud which were reported to the Financial Stability Department of the central bank. These include cheque fraud, email/cyber fraud, impersonation, e-money fraud, and forgery.

It said the fraudsters attempted stealing GH¢115.5m but were only successful in making away with GH¢33.4m, representing 29 percent.

The bank recommended that to forestall future occurrences, contract or temporary staff of banks and specialised deposit-taking institutions must be adequately vetted by the police in order to avoid employing fraudsters in the industry.

Also, the BoG tasked the financial institutions to review remuneration and working conditions of contract staff and mobile bankers and aligned these to that of permanent staff, since the former are often found to be involved in suppressing the value of cash and deposits.

“Staff of banks and specialised deposit-taking institutions, when undertaking transactions relating to special cheque-clearing, must be very diligent, since most cloned cheques come through that channel,” the report said.

The central bank also expects consumers to be encouraged to use efficient electronic payment methods that keep an audit trail of fund movements, even as banks and specialised deposit-taking institutions enforce directives and due diligence on over-the-counter payments.

For the mobile telecommunication companies, the central bank encouraged them to enhance their registration and monitoring processes in order to significantly reduce the incidence of fraudulent call diversion, chip swaps and number porting.