Top officials in some banks gambled, stole billions – EFCC

According to the Economic and Financial Crimes Commission (EFCC), some banks failed due to mismanagement by top officials, Charmingpro reports 

Abdulrasheed Bawa, chairman of the Nigeria Deposit Insurance Corporation, spoke in Lagos at a workshop titled “Effective Investigation and Prosecution of Banking Malpractices that Led to Bank Failure” (NDIC).

The police officer advocated for collaborative measures by relevant stakeholders to combat bank failure.

According to Bawa, forensic analysis of the EFCC’s failed banks’ annual reports, statements, and other financial documents revealed a pattern.

He lamented that banks fell short of expectations due to fraud, mismanagement, inexperience, and the initial absence of regulatory laws and authorities, as represented by Ahmed Ghali, EFCC Lagos Zonal Commander.

Bawa recalled that the industry’s first failure occurred between 1930 and 1958, when some banks were liquidated.

He stated that over 20 cases, including Alpha Merchant Bank, Financial Merchant Bank, and Republic Bank, were recorded prior to the establishment of the Central Bank of Nigeria (CBN).

Bala stated that in order to save the sector, the CBN raised the minimum paid-up capital of banks from N2 billion to N25 billion in 2004.

After the policy’s implementation reduced the number of banks from 89 to 25, the CBN issued a new policy in 2010.

Its goal was to divide banks into functional tiers and allow for varying levels of capital, as opposed to the current single minimum capital of N25 billion.

According to Bawa, the policy revealed that a number of financial institutions did not simply fail, but were destroyed by identifiable individuals.

“The tragic failure of some of the failed banks demonstrated that the banking industry had been cajoled and manipulated by humans and sophisticated fraudsters.”

“In some failed banks, management stole billions of Naira in the name of borrowing; others even gambled with depositors’ funds to speculate on the stock market and manipulate share prices.”

“Some banks made loans to billionaires and industry titans whose wealth was actually money belonging to the poor, which they “borrowed” and refused or were unable to repay,” he added.

Bawa urged the NDIC to embrace technology in order to meet the investigative and prosecutorial challenges of the twenty-first century, and he called for regular credible economic and financial information.


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