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BoG revamps committee to fight economic crime

People walk past the Bank of Ghana in Accra, Ghana. Photo by: REUTERS / Zohra Bensemra
Bank of Ghana

The Bank of Ghana has revamped a committee of law enforcers, bankers and related agencies to create a strong collaborative platform to fight financial and economic crime in the country.

The committee, which is christened COCLAB (Committee for Co-operation between Law Enforcement and the Banking Community) is an initiative of the BoG based on INTERPOL’s 1988 Resolution to help curb economic crime around the world.

At a COCLAB Workshop, Second Deputy Governor of BoG, Elsie Addo Awadzi, speaking on the behalf of the Governor, Dr. Ernest Addison, the committee was revived to provide a
platform for strong collaboration among the banking industry, national security
and law enforcement agencies; the Judiciary, and other key Agencies, to step
up the fight against financial crime.

The Committee therefore draws its membership from BoG, Ghana Association of Banks, the Judiciary, the Ministry of Justice and Attorney General’s Department, the Ministry of Interior, the National Security Coordinator’s Secretariat, Interpol Ghana, the Economic and Organized Crime Office, the Financial Intelligence Centre, the National Investigations Bureau, the Ghana Police Service, Ghana Immigration Service, the Ghana Revenue Authority, the Registrar General’s Department, and the National Communication Authority.

Elsie Addo Awadzi noted that the work of the Committee is critical now more than ever, particularly in an era where digital payments platforms have created an even bigger risk for fraudsters to take advantage off.

Indeed, a recent report from cybersecurity firm SECURE-D on digital fraud, indicated that in 2022, there is an estimated US$44 billion for fraudsters to cash in on along various digital platforms. Already, some merchants in parts of the world have started restricted access to some digital platforms because of increased fraud on those platforms, while even widely accepted payment card companies like MasterCard and Visa have reported widespread fraud on their platforms.

Even in Ghana, an expert in the digital payment industry recently revealed on grounds of anonymity that one individual was found to have engaged in money laundering on some digital platforms to the tune of over GHS12 million, not to talk of several other smaller amounts by other criminals.

The Deputy BoG Governor said “combatting financial crime through information sharing and strategies…and working closely together to investigate and enforce the relevant rules against perpetrators of financial crime and their enablers, is essential to building a healthy and resilient economy and nation.”

According to her, financial crime in all its forms including money laundering, terrorist financing, fraud (whether through offline or cyber related), siphoning and diversion of funds from the financial system by insiders to related parties, and others, all erode the integrity
of the financial system and destroys the confidence and trust that the Ghanaian
public and foreign partners repose in it.

She said the loss of confidence in the financial system has adverse ramifications for the economy, such as a reduction in the rate of savings and investments in the formal financial system, a reduction in international trade facilities and foreign investment inflows that support the economy.

Elsie Addo Awadzi therefore charged the Committee to look at the Central Bank’s 2021 Fraud Report, which highlighted a disturbing prevalence of fraud in the banking sector, as reported by banks and other regulated institutions.

“Disturbing still, is the fact that most of the reported cases of fraud involve staff and contractors of these financial institutions. Another worrying trend from the 2021 fraud report is the increasing levels of fraud associated with electronic money channels such as ATM fraud, mobile money fraud, and cyber fraud,” she stated

Indeed, BoG’s 2021 Fraud Report indicated that over 53% of fraud in the banking sector involved staff of the banks and special deposit-taking institutions (SDIs), while the total value of fraud reported by EMIs (electronic money issuers) for 2021 amounted to ¢14.2 million.

“I therefore urge you to take a critical look at these developments and identify concrete measures to help to address the underlying factors, so that we reverse the trends. I also urge you to work together to speed up investigations and prosecutions for financial crimes, that led to the failure and demise of 420 of our regulated institutions in our recent past, as well as brought untold hardships to depositors, former employees, other creditors, and ultimately, taxpayers, that had to pay to provide relief for those affected,” she told the Committee members.

She said appealed to the Committee to support the Central Bank’s efforts at sanitizing the forex bureau sector, by strictly enforcing existing rules for the fair and transparent conduct of business by licensed forex bureaus, and by clamping down on illegal forex operations (the so-called black market).

According to her, BoG relies on criminal investigative and law enforcement agencies to help with enforcement efforts, saying that the Central Bank counts on on COCLAB now more than ever to help restore order and fair pricing to promote the Ghana cedi’s stability.

She assured them of BoG’s continuous support and partnership in their work.

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