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BoG report: Banks lose GH¢ 61m to fraud, 53% Of cases involve staff

BY: Suleiman Mustapha

The banking sector in the country last year lost GH¢61 million through fraud and other banking malpractice. This represents a surge of 144 per cent losses due to fraud in the banking sector from GH¢25 million in 2020 to GHC61 million in 2021.

In all, 53.46 per cent of the incidents of fraud reported last year involved staff of the financial institutions.

The upsurge in losses recorded for the period was due to the increased use of online payment platforms for fraudulent transactions.

This was contained in the Banking and Specialised Deposit-Taking Institutions (SDIs) and Electronic Money Issuers (EMIs) fraud report for 2021 issued by the Bank of Ghana.

Statistics

Statistics indicate that staff involvement in fraud cases increased to 278, as compared to 253 in 2020, representing an increase of 9.88 per cent year-on-year.

Rural and Community Banks recorded the highest rate of staff involvement in fraud with a figure of 46.04 per cent, the Universal Banks accounted for 28.06 per cent, while the Savings and Loans companies accounted for 16.55 per cent.

The report, however, recorded 2,347 attempted fraud cases, which represents a minimal decline of 12.09 per cent or 2,670 in 2020.

Another significant fraud type was impersonation which recorded a loss of GH¢10 million. This loss was attributed to lack of due diligence on the part of bank staff and customers of financial institutions when carrying out transactions.

Weak systems

ATM card/POS related fraud also recorded the highest loss of GH¢22 million. This can be attributed to negligence of some customers and weak systems of some financial institutions.

The significant fraud types that accounted for this figure included ATM card/POS fraud, impersonation, lending and credit fraud, forgery and manipulation of documents, cash suppression and E-money fraud.

The increase in the usage of electronic and digital platforms in the financial sector resulted in an increase in ATM card/POS fraud.

The EMI sector reported a significant number of mobile money (MOMO) fraud incidents and loss values in 2021.

EMIs also recorded 12,350 mobile money-related fraud incidents in 2021. The total value of fraud reported by EMIs for the 2021 amounted to GH¢14.2 million.

Rural banks

Out of 144 licensed Rural and Community Banks, 111 of them, representing 77.08 per cent of the sector submitted fraud reports for the period under review.

The rate of submissions in the Rural and Community Banking sector increased marginally from 105 institutions in 2020 to 111 institutions in 2021, representing an increase of 5.71 per cent in year-on-year terms.

For the Microfinance Institutions, out of 180 licensed institutions, 34 of them submitted fraud reports for the year 2021, representing a submission rate of 18.88 per cent. In 2020, 35 MFI institutions submitted fraud reports for the sector.

Out of the 25 licensed Savings and Loans Companies, 13 institutions submitted fraud reports for the period under review, representing a submission rate of 52 per cent, as compared to a submission rate of 48 per cent recorded in 2020.