Ban bank staff guilty of fraud from practising – Dr. Atuahene

A corporate governance and banking consultant, Dr. Richmond Atuahene says employees in the banking sector who are found culpable of fraudulent activities should be banned from practising in the sector.

This comes days after reports emerged that the Bank of Ghana is currently in consultation with stakeholders to fine-tune a new code of conduct to guide the conduct of bankers and other employees in the sector.

According to the central bank, the new code will among other things, prevent employees in the sector from practising for a specified period of time if found guilty of a crime.

But Dr. Atuahene, speaking with Citi Business News, insisted that persons who go against the ethics of the sector should have their licenses revoked completely.

He said, “The Bank of Ghana only came out with professional ethics when the corporate governance directive came. But bank officials in this country have not been professional at all. The reason is that it’s been going on for years and I think that if Bank of Ghana wants to do that, they must be very tough on those who are found culpable. You find one man who collapsed a bank becoming the chairman of another institution.”

“So it is a step in the right direction. But if BoG says you are really found culpable, you should be banned for life. I don’t believe you should go for five or ten years. If they do that (ban them completely) so that anyone who is going to perpetrate any fraud will first think about not having a chance to work in any institution. That will serve as a deterrent to others,” he added.

Fraud by employees

In 2018, Dr. Joe France, the Director of Financial Stability of the Bank of Ghana disclosed that over 90 percent of fraud-related cases in the banking sector were associated with the employees.

According to him, investigations had revealed that some of the banking staff masterminded most of these frauds. He thus urged management of banks to be wary of people they recruit and do proper checks before employing them.

The Head of the Financial Integrity Office at the Bank of Ghana, George Nkrumah, in 2019, also urged financial institutions to ensure strict compliance with employee background checks as a way of minimizing fraud perpetrated by employees.

2019 statistics

This menace continues to be on the rise as the BoG’s 2019 banking industry report indicated another increase in the number of fraudulent activities planned by staff.

The report noted, “It is important to stress that about 94 percent of the fraud cases reported as suppression of cash and deposits were perpetrated by staff (either contract or permanent) of the financial institutions. The alarming rate of involvement of bank staff in the perpetration of fraud in the banking sector, calls for significant reforms in the engagement, remuneration and disengagement processes of employees and contractual staff of financial institutions.”

It is for this reason that the central bank, in the report, directed all financial institutions to among other things, strictly monitor staff (including contractual staff) and every transaction executed by staff by implementing appropriate internal controls”.

Banks and specialized deposit-taking institutions have also been directed to let the Ghana Police Service vet all contract or temporary staff in order to curb the practice of employing fraudsters in the sector.