Diamond Trust Bank Taken To Court Over Huge Fraud Case
Bank fraud in foreign banks frustrating the development and prosperity of our motherland Uganda
Commercial banks are supposed to be the safest place where people can keep their hard-earned money but it looks like this is not the case anymore. It is no longer even attractive to get loans from banks because even those are fraudulently mismanaged. The banking halls are fast becoming a place where client’s money is stolen with ease and unapologetically. Bank frauds have been on the rise the world over and are being aided by technology advancement like computers and internet. A bank fraud is defined by different online sources as the use of potentially illegal means to obtain money or assets owned by a financial institution or to obtain money from depositors by fraudulently posing as a bank. And like many developing countries, bank frauds have not spared Uganda. Banks in Uganda have tasted the wrath of bank fraudsters and customers have paid dearly for it. Some banks have orchestrated these scams and frauds. Bank of Uganda acknowledges that despite notable growth realized in the financial sector, banks face the problem of bank frauds and the vice is on the rise. The central bank says bank frauds take various forms ranging from alteration of cheques and / or counterfeit to skimming or cloning of cards. The increase use of technology and introduction of new technologies has also made it easy for cybercrime to lodge itself into the banking system making it easy for fraudsters to illegally syphon money from people’s bank accounts. It is also common knowledge bank frauds thrive on the help of bank employees who aid this bad deed. Bank employees from the lowest ranks such as security guards, to midlevel personnel like the IT people to senior managers often times facilitate these fraud activities. In Uganda, one bank that has been heavily been hit by fraudulent activities (from within) over the years is Diamond Trust Bank. Despite having existed for the last 75 years and heavily invested in bank security controls, the bank has always been hit by fraud scandals and scams. These scandals have stained the image of the bank listed on the Nairobi Securities Exchange (NSE). Diamond Trust Bank has been in the news in Kenya for far big money fraud cases with customers accusing the bank of stealing their money or mismanaging their loans. At the moment in Uganda, there is a case filled in court against Diamond Trust Bank for irregularly and unlawfully debiting approximately Shs100bn from customers accounts over a spread long period of time. Apparently, the affected customers never authorized these transactions and are now seeking legal redress because the bank is reluctant to return their money. Elite News, a local news website, quoted an unnamed source confirming that this money had been illegally debited without the customers consent and a court case is coming up soon. As a requirement, commercial banks are mandated to adhere to Bank of Uganda Financial Consumer Protection Guidelines (FCPGs) however, in this case, Diamond Trust Bank has flaunted these guidelines and ignored the responsibility to protect the customer and instead preyed on him. In a similar court case, in July 2017, Diamond Trust Bank was involved in a loan fraud case with Francis and Stella Nekuusa of over a Sh10bn ‘loan’. The couple accused Diamond Trust Bank of fraud. The bank has also suffered from the improper behavior of their employees who on several occasions decided to run off with millions of depositors monies. This has put depositors’ money at risk and points to administrative weakness within the bank. This also plays not well on the bank’s image especially for a bank that says it’s focus is on the SME sector and is committed to enhancing convenience for customers through branch network expansion. The bank currently has 33 branches spread across Uganda but it recently closed some branches due to underperformance.