, NAIROBI, Kenya Feb 15 – A new report shows that financial institutions lost Sh293 million in January alone through fraud and other financial malpractices.
The confidential report compiled by the Banking Fraud Investigations Department (BFID) reveals that some of the money was lost by banks in through collusion of employees.
It involves some 56 cases, some of which are still under investigations by detectives attached to the BFID, a department of the police which works closely with the Central Bank of Kenya to detect fraud-related activities in banks and other financial institutions.
"The employees or their agents\’ forged documents and cheques for their own benefits with the sole aim of acquiring money fraudulently," part of the report states.
The report compiled by the Banking Fraud Investigations Department Director Gabriel Mbuvi and seen by Capital News said some of the suspects were arrested and taken to court while others are still at large.
The report dated February 11 is addressed to the Central Bank of Kenya Governor Professor Njuguna Ndung\’u.
It said detectives had managed to recover some Sh234 million of the lost amount but no further details are given.
In December last year alone, commercial banks lost a staggering Sh500 million to fraudsters, the highest amount lost ever to fraudsters in a single month.
The money disappeared from 21 banks and 13 other financial institutions across the country.
In some of the cases however, it involved situations where employees or their agents attempted to commit fraud, but the final report that is usually submitted to the Central Bank on a monthly basis reflects it.
"Any financial malpractice, whether attempted or real fraud is noted down, such reports are very crucial to the banks and that is why we usually get to investigate them thoroughly," an official at the BFID said.
"Almost every bank reports fraud-related cases, it may be the actual loss of money or situations where they detect attempted fraud," the official said.
Multiple interviews with detectives involved in tracking down fraudsters in banks said the most common malpractice is forgery and falsification of documents for customers or their agents.
One of the incidents noted in the latest report submitted to the CBK involves the loss of Sh800,000 from a commercial bank through cheque leaf forgery.
"There are instances where bank staff collude with outsiders to withdraw or claim money in dormant accounts," a detective who cannot be named because he is not authorised to speak to the press said.
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