Banks lose Sh294m in a month

By CYRUS OMBATI

Banking institutions lost a staggering Sh294 million last month alone, through fraud.

There were 56 cases that were reported in the period involving bank employees and outsiders.

Out of the stolen money, police and the involved banks recovered Sh234 million. Officials at the Banking Fraud Investigations Unit (BFIU) said most of the fraud cases involved banking staff, privy to targeted accounts.

BFIU detectives have since prosecuted 13 cases and returned Sh71 million to the owners. The other amount of money is still frozen, as the cases are pending before courts.

Head of the BFIU, Gabriel Mbuvi, declined to comment on the cases, as they were still in court.

He, however, said January cases dropped by 17, compared to the 73 that were reported in December.

Most of the cases being reported targeted banks, police said.

The report came in the wake of an alarm that was raised over rising cases of fake money being laundered at various mobile phone banking agencies.

Validation machines

And to address the problem, police want the agencies to install UV light currency validation machines.

They want all mobile money dealers to ensure they have the machines to stop fraudsters who are on the loose with fake currencies.

"Fraudsters have been visiting the agents and making deposits using fake currencies at an increasing rate. Installation of the machines would increase detection rate of counterfeit currencies in the hands of fraudsters out there," said a police officer.

Increased use of credit cards has also exposed the sector to fraudulent activities like cloning of cards, use of stolen ones, forged authorisation codes and collusion by merchants and fraudsters.

Out of the 16 types of fraud that are classified, the Real Time Gross Settlement Systems leads.