Why Nigerians should listen to NDIC

By SALISU NA’INNA DAMBATTA

Many Nigerians have been painfully swindled of millions of their hard-earned money through various scams. Consequently, some victims of scams commit suicide, others denied prosperity and many are left in unpayable debts.

Internet scammers have stolen money from people; ponzi schemers have schemed out numerous Nigerians of their cash, just as dubious and unregistered financial services operators have ruined countless financial nests.

The destructive nature of especially Ponzi schemes was highlighted by Dr. Okey Umeano of the Securities and Exchange Commission in an edition of the Accounting and Business (AB) magazine where he wrote, “Ponzi schemes in Nigeria have collectively cheated citizens of an estimated US$1bn (₦1.5 Trillion).”

The Ponzi schemers succeeded in their activities largely “because people fail to recognise them for what they are – fraud,” he noted.

The CBN Financial Stability Report for 2024 indicated a nearly 50 per cent increase in cases of financial fraud. Up to 70 per cent of losses were through digital channels and unregulated platforms.

The Securities and Exchange Commission (SEC) has cautioned the investing public against doing business with more than 30 Ponzi investment schemes.

The Economic and Financial Crimes Commission (EFCC), said in its 2021 report that its prosecution of financial suspects led to the conviction of 2,220 offenders by courts, a proof that fraud of various types are widespread in the country.

In its January to June 2025 operational report, the EFCC said it has arrested 1,427 suspected Internet fraudsters. They ride the Internet to defraud people. Evidence shows that the Yahoo boys use stolen money to buy luxurious cars, costly vans, live in exotic houses and stay in luxury hotels.

Sadly. empirical evidence indicates that no financial institution or system in the world has an absolute and airtight mechanism against fraud, including Central Banks.

In 2015 six officials of the Central Bank of Nigeria and 16 staff of commercial banks were arrested by the Economic and Financial Crimes Commission for alleged stealing of ₦8 billion worth of defaced and mutilated Nigerian currency notes meant for destruction.

UK Finance, the collective voice for the banking and finance industry in the United Kingdom said in its latest annual report that, “Fraud continues to pose a major threat with over £1 billion stolen through payment fraud in 2024” There were 3.13 million fraud incidents in the reporting period.

“Criminals stole £1.17 billion through unauthorised and authorised fraud in 2024 and Banks prevented £1.45 billion of unauthorised fraud through advanced security systems,” the report said.

It is within the context of safeguarding against fraudulent activities in banks and other financial institutions that the recent advise by the Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Dr. Oludare Sunday becomes apt. We should listen to him and heed it.

His advised Nigerians in a speech at the 2025 Abuja International Trade Fair to stay away from banks and other financial institutions which were not licensed by the Central Bank of Nigeria (CBN) and refuse to patronise any bank, fintech company and payment services providers without NDIC insuarance coverage.

The MD cautioned Nigerians because his organisation is statutorily responsible for maintaining financial stability by preventing bank failures, detecting and halting suspicious transactions and insuring deposits in banks to prevent depositors from bankruptcy should insured financial institution fail. The NDIC insuarance cover guarantees the reimbursement of depositors’ money to specified limits.

And to prevent bank failures, the NDIC intensely supervises, monitors and regulates financial institutions to ensure their financial health and have a sound risk management system. This provides a safety assurance for depositors, promotes financial stability and maintains confidence in the banking system.

It is significant that the Chartered Institute of Bankers of Nigeria (CIBN) and the NDIC have recently “agreed to deepen cooperation in digital banking, cybersecurity, fraud prevention and risk management.”

*Salisu Na’inna Dambatta wrote from Abuja