By Special Investigative Editor [The Brain Magazine] | July 2025 Edition
When the average Nigerian loses money to online scams, we look toward the banks to help us track, reverse, and defend. But what happens when the banks themselves become the thieves?
What happens when the custodians of our nation’s wealth become conspirators in its disappearance?
In recent years, the Nigerian banking industry has begun to resemble what many now call "legal yahoo yahoo." With increasing reports of funds disappearing from dormant or deceased accounts, unexplained deductions, failed reversals, and complicit staff, the public confidence in our banks is shaking to its foundation.
The Alarming Trend: When Did It Begin?
Though isolated bank frauds date back decades, the post-2010 era—when digital banking, BVNs, and mobile money emerged—marked a disturbing shift. Fraud moved from forged cheques to digital manipulation. By 2016, the Central Bank of Nigeria (CBN) reported over ₦2 billion lost to bank-related fraud. The figure rose alarmingly after COVID-19, reaching nearly ₦10 billion in 2023 alone.
What’s worse? These are only reported cases.
Anatomy of the Rot
A detailed analysis of reported cases (via CBN, NDIC, and media probes) reveals seven major fraudulent patterns within banks:
-
Unreleased Funds in Deceased Accounts
Families seeking access to deceased relatives’ money often face delay, denial, or total disappearance of funds. Banks exploit legal loopholes and delay probate deliberately. -
Unauthorized Deductions
Charges labeled “admin fee,” “platform maintenance,” or “SMS alert” are increasingly arbitrary—without customer consent or regulation. -
Internal Diversion to Forex Trading
Some bank staff have been exposed for illegally pooling dormant or floating funds into unauthorized forex trades, betting on high-risk markets using depositor funds. -
Collusion with Fraudsters
Staff leak customer data, override reversal commands, or delay alerts to allow cybercriminals execute theft undetected. -
USSD & App Fraud
SIM swap scams and app breaches often lead to unauthorized transfers—yet banks deny liability or delay reversals. -
Suppressed Failed Transaction Reversals
Customers send money, transactions fail, but banks quietly refuse automatic reversal, banking on user ignorance or frustration. -
Cybersecurity Failures Disguised as Glitches
Alleged “system upgrades” become coverups for sophisticated internal breaches.
The Brains Behind the Menace
Contrary to public belief, this is not the work of a few rogue tellers. This is organized crime—inside banks.
It involves:
- Bank Executives: Who sign off fraudulent transactions or ignore warning signals.
- IT & Audit Departments: Where insiders disable alert systems or manipulate digital trails.
- Regulatory Saboteurs: Some CBN or NDIC staff are bribed to overlook internal red flags.
One insider told our team, "If a bank wants to ‘legally’ take ₦500 million, they just use obscure account clusters. No one checks deceased accounts without court orders."
Trust Decline: From Police to Bankers
As Nigerians increasingly distrust the police due to corruption and bribery, banks are now joining the infamous hall of public disbelief. When banks act like "yahoo boys in suits," society loses more than money—it loses moral balance.
Who Should Be Held Accountable?
- Banks & Their Boards: They are responsible for what happens under their roofs.
- CBN: As the regulator, CBN must stop being reactive and start imposing heavy sanctions.
- EFCC/ICPC: These bodies must launch system-wide investigations, not just single case arrests.
- The Nigerian Senate: The Banking and Finance Committees have been silent for too long.
Proposed Solutions
- Public Audit of Dormant and Deceased Accounts: Publish reports on movement of such funds annually.
- Compulsory Forensic Teams in All Banks: Independent watchdogs to monitor all high-risk transactions.
- Whistleblower Protection Acts: Many bankers want to speak—but fear for their jobs.
- Digital Transaction Courts: Fast-track courts for fraud victims to seek redress within 30 days.
- Public Listing of Fraudulent Banks & Executives: Name and shame repeat offenders.
Final Word: "Enough is Enough"
We cannot build a prosperous nation on a rotting banking culture.
Banks must be safe spaces, not dens of modern financial bandits.
The Central Bank of Nigeria must wake up.
The Senate must stop sleeping.
The judiciary must dispense justice with urgency.
And we—the people—must hold all of them to account.
Because if the bank becomes the fraudster, who do we trust?
Have you been a victim of unexplained bank fraud?
Share your story with us at [thebrainmagazin@gmail.com/08166008359].
This is not the end of the story—it's just the beginning of the fight.
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