Heritage Bank Customers in Panic Over Bank’s True State
By Dipo Olowookere
If a poll is conducted on which bank customers in Nigeria are in confused and panic mode at the moment, the result might show those with Heritage Bank in the lead.
News reports hitting the cyber space lately concerning the financial institution have not been very palatable to the ears. Even the deaf and the blind are getting worried too.
In the past months, Heritage Bank has had to run to the roof tops to allay the fears of its numerous customers that it is not in distress as being reported in some quarters.
Also, the Central Bank of Nigeria (CBN) has had to join in the ‘town crying’ that Heritage Bank is healthy and not heading to the rocks.
Some weeks ago, it was reported that Heritage Bank Plc was unable to meet customers’ immediate withdrawal requests and also wiped out all foreign currency domiciliary accounts.
It was further alleged in the report that senior management staff of the bank plunged it to crisis through embezzlement carried out by award of bogus contracts to relatives.
According to a latest report, it was alleged that Heritage Bank is presently like a ghost its management is desperately trying to give the appearance of a virile financial institution.
It was also alleged that Heritage Bank sold one of its properties on Femi Pearse Street, Victoria Island, Lagos, to attain a measure of liquidity and used the proceeds to pay the rent of the bank’s offices at Ajose Adeogun and Moshood Olugbani Streets, both on Victoria Island, Lagos.
Furthermore, the report further alleged that the bank’s management has been borrowing money to pay salaries since September 2016 and has also embarked on sacking its workers in batches so as to lessen its workforce due to its present state.
In all these, customers of the bank do not know what step to take at the moment; whether to quickly withdraw all their hard-earned money or leave it with the bank or if to believe assurances from the bank and the CBN or to reports warning them of imminent danger.
What has fuelled the dilemma more is the fact that in Nigeria, it is normal for management of banks to make things look very good until bubble bursts. Cases of banks looking very vibrant on the outside in the late 2000s, which were later sold, quickly come to mind.
It is now being feared if Heritage Bank customers won’t turn out to be like participants of MMM Nigeria, who were being assured of safety of their money by operators despite warnings from government agencies, but only to wake up this week to learn that they have been barred from withdrawing their money until 2017, dashing their hopes of a vibrant Christmas.
But in all, Heritage Bank has continued to assure its customers that it is still very healthy and that their money is in safe hands.
Nigerian Banks Immune to Global Banking Jitters—Emefiele Assures
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has assured that Nigerian banks are not directly exposed to the Silicon Valley Bank crisis and, by implication, the wider global banking jitters.
The CBN Governor made this statement when responding to questions after the Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday.
Mr Emefiele stated that Nigerian banks are healthy, having met all the prudential guidelines it set for the financial system.
According to the CBN chief, Nigerian banks have already implemented the CBN prudential guidelines, such as its cash reserve ratios, capital adequacy ratios, non-performing loans (NPL), and liquidity ratios.
There have been concerns about the health of the global financial system in the aftermath of the March 10 collapse of Silicon Valley Bank.
According to the CBN Governor, the apex bank conducted a review of all the bond portfolios of Nigerian banks and determined that none of them was exposed to the failed bank.
He suggested that Nigerian banks are ultimately owned by bank depositors and not shareholders.
“We will rather dispose of shareholders than make depositors lose money,” suggesting that bank customers had more no loss in banks than their shareholders.
He, however, did not speak to exposure to other banks currently caught in the line of fire, such as Credit Suisse.
US regulators had stepped into the trouble following the troubles in SVB and Signature Bank by guaranteeing deposits earlier this month.
However, the collapse of Credit Suisse over the weekend reignited fears of contagion across the financial sector.
Unlike SVB, a mid-tier bank, Credit Suisse is a top financial organisation – big enough that it is among 30 banks considered to be of systemic importance to the global economy.
UBS agreed to buy its embattled rival Credit Suisse for $3.2 billion on Sunday, with Swiss regulators playing a key part in the deal as governments looked to stem a contagion threatening the global banking system.
The terms of the deal will see Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold.
To Make e-Payments More Acceptable, Nigeria Needs to Curb Fraud
By Victor Irechukwu
When a credit alert drops on your phone, chances are you will get excited. Even if it wasn’t a surprise and you were expecting that money. But when it is a debit alert, there’s also a certain type of gloom you feel; you want money to keep coming in but as little as possible of it going out.
It may be safe to say most of us feel that way.
Now, imagine the debit alert was for a transaction you know nothing about. A commonly reported theme has been alerts that your card was used to make deposits on a gambling website, whereas you may never have even indulged in gambling your entire life.
At other times, you are shown a debit alert by someone who wants to purchase goods or services from you, but only later realise they showed you what has now been termed ‘fake alerts’. By this time, your goods, for instance, would have been long gone.
In recent months, social media has been awash with reports of money literally growing wings and leaving some people’s accounts to those of other people without authorisation. Many of these cases have gone viral on social media, causing embarrassment for the banks involved – The issues are either quietly – or corrected with public acknowledgement. But not all are resolved, at least not yet.
As much as the country and even individuals would like to go cashless, these bad experiences leave a sour taste in the mouth, and they have continued to rain on the parade as Nigeria marches towards a cashless economy. It must be stressed that a cashless economy does not mean the theft of money will stop, what it does is to change how thieves go about it. But more importantly, it also doesn’t mean thefts must occur, at least not if systems are strengthened and the right protocols are put in place.
In the electronic world, an article on The Balance Money describes hackers as bank robbers and muggers, and in a cashless society, we are all exposed to them. According to the Nigeria Inter-Bank Settlement System Plc (NIBSS), growth in the use of electronic channels, specifically mobile devices, has also enticed fraudsters into focusing their efforts on these electronic channels.
When an attack is successful and the culprits are able to drain funds from your account, you could be effectively left stranded. God forbid you needed that money for a life-threatening emergency because that could be the end unless you are one of the lucky few whose funds get recovered in a place like Nigeria – and on time too.
Agusto & Co.’s ‘2022 Consumer digital banking satisfaction index for Nigerian banks’, found that approximately 59 per cent of respondents had been fraud victims on the digital platforms of their banks.
The figures in terms of the number of attacks, success rate and amounts lost remain a source of concern. By the third quarter of 2022, the total number of frauds & forgeries cases reported by Nigerian banks was 19,314 as against 27,356 incidents reported in the second quarter of 2022.
But there’s more. While the number of attacks represents a 29.40 per cent decrease between the periods, the total sum reported to be involved in fraud cases increased by 9.50 per cent to N9.62 billion from N8.78 billion in Q2 2022. Also, for the total amount lost due to fraud incidents, there was a significant increase of 207.94 per cent from N1.17 billion in the second quarter of 2022 to N3.62 billion in the third quarter of 2022.
In essence, the number of attacks may have decreased within that particular period, but more money was lost to the fraudulent attacks.
These insights were provided in the Q3 2022 report by FITC, an organisation mandated to receive data on fraud from all Nigerian banks and prepare quarterly reports. The figures show that the highest number of occurrences were recorded under computer/web fraud followed by mobile fraud which includes fraud activities through USSD transactions and ATM-related fraud.
BusinessDay even reported that every day between January and March 2022, there was an average of 450 incidents of frauds and forgeries against Nigerian bank customers. In those three months, the attackers targeted N14.65 billion, with Computer/Web Fraud responsible for N10.57 billion (72.18 per cent), and Mobile Fraud recording 1.48 billion (10.08 per cent).
Those 40,522 attacks resulted in N1.54 billion lost by bank customers. Computer/Web Fraud accounted for 70.51 per cent (N1.07 billion), followed by Mobile Fraud accounting for 17.58 per cent (N270.92 million) at the time.
Going back a bit, data by NIBSS also showed that fraud attempts via mobile channels saw a 330 per cent increase year-on-year (YoY) between 2019 and 2020, while attempts via web and POS channels saw a 173 per cent and 215 per cent increase YoY. In those nine months, 96 per cent of the attacks were successful, and there were 46,126 of such attacks.
“This trend is expected to continue as Nigeria further grows financial inclusion and customers become increasingly dependent on electronic channels for their day-to-day transactions,” said NIBSS. In other words, things are expected to get a lot worse, according to the organisation described as Nigeria’s central switch for the financial industry.
Fraud is and has always been a large threat to commerce and e-payment transactions. It is impossible to totally eliminate the chance of fraud, but applying timely measures and ensuring the use of secure payment infrastructure can help reduce or even eliminate these risks. Security should continue to be top priority for every party involved in ePayment transactions. Fraud prevention involves taking measures to stop fraud from occurring and taking steps to detect frauds quickly (when they occur) and stop them as soon as possible. Different techniques for preventing and detecting frauds are required as there are different types of fraud in e-payment transactions.
Awareness of these risks by merchants, consumers and individuals plays an important role in reducing fraud in e-payment transactions. Merchant awareness and education is important – they should be aware of the types of frauds, implications and application of best practices. Consumer awareness and education is also important in order to reduce identity theft or payment data theft. This would help the individual in adopting an active and cautious attitude when carrying out electronic transactions. It could teach them to be aware of possible risks, avoid e-scams, and minimise giving vital information to merchants (or other parties) when carrying out electronic payments.
Victor Irechukwu is the Head of Engineering at OnePipe
NGX RegCo Sanctions Infinity Trust Mortgage Bank Over Price Sensitive Info
By Dipo Olowookere
The Nigerian Exchange (NGX) Regulation Limited has sanctioned a leading lender for the real estate sector, Infinity Trust Mortgage Bank Plc, for violating one of its listing rules.
In a regulatory document obtained by Business Post over the weekend, the mortgage bank was accused of failing to “disclose the confirmation of the appointment of the new Managing Director of the bank,” which the regulator could have an impact on the share price of the organisation on the stock exchange.
Last month, Infinity Trust Mortgage Bank, in a statement, announced the appointment of Mr Sunday Olumorin as its Managing Director, succeeding Mr Olabanjo Obaleye, who completed his tenure as the head of the company.
In the notice, the financial institution said the appointment, which was in line with its succession plan, was confirmed by the Central Bank of Nigeria (CBN) on June 15, 2022.
“Having held various senior executive roles with the bank, Olumorin (an executive director in the bank) brings over 20 years’ experience of working across all areas of mortgage, finance, investments, consulting and real estate in Nigeria,” the statement said in part.
This development did not go down well with NGX Regco, which stated that the announcement went against “Rule 17.5: Price Sensitive Information, Rulebook of the Exchange 2015 Issuers’ Rules.”
In view of this, the regulator has forced the company to undergo mandatory compliance training (MCT)
According to the NGX, every listed company is required to provide timely information to enable it efficiently perform its function of maintaining an orderly market.
In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of NGX, 2015 (Issuers’ Rules) and NGX’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on publication of announcements or press releases via the issuers’ portal, listed companies are required to obtain prior written approval from NGX RegCo before publications that affect shareholders’ interests are made in the media or via the issuers’ portal.
Also, NGX RegCo sanctioned Multi-Trex Integrated Foods Plc with an MCT for violating Rule 19.6: Submission of Notice and Other Information Documentation to the Exchange; Rulebook of the Exchange 2015, (Issuers Rules), as Guinea Insurance Plc was fined N453,600 for failing to “utilize the issuers portal to file sensitive information.”
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