Statistics reeled out last week on banks fraud in 2018 is frightening enough to knock some sense into the heads of the slave drivers in Nigeria’s banking system. But they are incongruously adamant and recalcitrant. The red flag was first raised in 2013, but everyone ignored it.
Banks made a bumper harvest in 2018 even as the economy just lumbered out of recession. Their cumulative profit before tax (PBT) rose from N150 billion in 2017 to N310 billion in 2018.
However, the bumper harvest in the banking system in 2018 was almost crowded out by the level of fraud during the year. The number of reported fraud cases rose from 26,182 in 2017 to 37,817 in 2018. The fraudsters attempted to steal N38.93 billion in 2018 as against N12.01 billion in 2017. The actual amount stolen in 2018 was N15.15 billion compared with N2.37 billion in 2017. The fraudsters’ success rate rose by almost 700 per cent in 2018.
The major source of worry is that a total of 899 staff of banks were involved in frauds and forgery cases in 2018. In 2017, only 320 workers were implicated.
As expected, casual workers topped the list of bank workers involved in frauds in 2018. The number of casual or temporary staff involved in fraud or forgeries in 2018 was 394, accounting for 43.83 per cent of the total number of staff implicated.
Mrs. Dolapo Lawore, a former president of the Chartered Institute of Bankers of Nigeria (CIBN) had warned in 2013 that 75 per cent of the frauds in the nation’s banking system were committed by the casual workers. They are taking revenge for the inhuman treatment by banks.
Outsourcing or casualisation was foisted on Nigeria’s banking system in 2009 by an odd combination of fraudulent risk management and insider dealings in the shares of banks listed on the Nigerian Stock Exchange (NSE).
The crisis rocked the Nigerian banking system to its very foundation.
The apex bank responded to the crisis by ordering extensive cuts in banks’ stupendous staff remuneration. Consequently, the banks took casualisation or outsourcing to unprecedented levels. They outsourced everything from security jobs to deposit mobilisation.
The graduates recruited for the jobs are offered starving wages as low as N80, 000 and given Herculean monthly targets. From the N80, 000 offered the casual worker, the outsourcing company collects N40, 000 monthly, leaving the casual worker with a paltry N40, 000 for the slave labour.
In the Holy Bible, Jesus Christ set the standard rule which stresses that “to whom much is given, much is expected”. Nigerian banks have reversed that rule to read like; “to whom less is given, much is expected”. They pay the casual workers less than N40. 000 per month for the millions each of them mobilises as deposit. The casual workers at the counters pay out millions daily to customers making withdrawals but collect monthly pays that cannot take them home.
In the banking hall, even a blind man can tell the difference between a casual worker and a permanent staff. The casual worker looks dejected, depressed and demoralized. Many are shabbily dressed.
Ironically most of the casual workers do not carry the ID cards of the banks they mobilize deposits for. That implicitly leaves depositors as the first casualty of the banking system’s casualisation policy.
A witty casual deposit mobiliser could flee with millions of the deposits gathered. Under that circumstance, the bank can easily disown the depositor in the event of the money missing in transit.
The banking system itself is deliberately toying with a dangerous cost-cutting policy that is already taking a toll on its lean resources. The policy is becoming even more expensive than engaging permanent workers. It is equally denting the image of the banking industry.
The lower end of the money market is the first and major casualty of the mounting fraud imposed on the banking system by the cruel policy of casualisation. The way the Nigerian money market is structured, banks casual workers have no access to depositors at the upper end of the market. They are very few compared to those at the lower end of the market.
At the close of business in December 31, 2018, total banks deposit in Nigeria stood at N21.73 trillion. Out of that figure, those at the lower end of the market (depositors with N500, 000 and below) constitute 97.5 per cent of depositors in the banking system and account for a scant N3.32 trillion.
In other words, 2.5 per cent of the depositors control 97.5 per cent of the deposits in the banking system. Casual workers have no access to the few depositors at the upper end of the market. The rich are mostly serviced by senior managers and directors of the banks. The poor are the vulnerable ones.
Perhaps the most inhuman aspect of the casualisation policy is that there is no condition of service for those caught in the web. They have no pension scheme.
Besides, the causal workers are not entitled to any form of medical care. The frugal spending package decreed by the Central Bank of Nigeria (CBN) in 2009 to curb the excesses of top bankers was directed primarily at the rank and file while directors and top managers retained their bumper pays.
It is obvious now that the inhuman policy of casualisation has lured workers into balancing their lean budgets with the proceeds of crime. The CBN should scrap that policy and force banks to engage everyone as permanent staff. With casualisation, the banking system is cutting its nose to spit its face.