Customers Money not safe at Sierra Leone Commercial Bank

Sierra Leone Commercial Bank is on the news again, and this time it is for the wrong reason. Just as it happened in the case of the Sierra Leone Roads Authority Welfare Fund, where over one billion Leones was withdrawn from the account surreptitiously, another fraudulent action has befallen the bank, with over one hundred thousand dollars transferred surreptitiously again from a company account to a personal account without the knowledge of the other party.

Fraudulent activities like these, though not a novelty in the banking institution, has caused customers to forfeit and lose huge amount of monies in and out of Sierra Leone.

This brings to mind how Frederick Willie must have regretted his decision to not only partner with Paul Bindi to open a joint account at SLCB, but also use the Sierra Leone Commercial Bank (SLCB) to operate a bank account called SUNDFREE Development Corporation. Both Willie and Bindi agreed that both of them should sign on any bank transaction. How the sum of US$125, 000 and NLe738,800 was allegedly transferred to the personal account of Bindi without the foreknowledge of his partner, is something the Criminal Investigations Department of the Sierra Leone Police is currently investigating before the matter is charged to court.

Frederick Willie is now looking for ways and means to get back his money into their joint account, a decision that the bank could take to avoid embarrassment, just as it did in the alleged missing Le 1 billion Sierra Leone Roads Authority (SLRA) Welfare Fund that was later refunded.

SLCB’s Company Secretary, Victor T. Biandoma Esq. confirmed on Tuesday 26th September 2023 that the bank handed over some staff to the CID for investigations, and added that they are currently complying with the police investigation. “There is an alleged case of fraud and we are complying with the police investigation,” he said.

What the Company Secretary must have realized is the fact that bank fraud erodes public trust in financial institutions and can damage their reputation.

A retired Banker told this press that when customers become aware of fraudulent activities within a bank, it raises concerns about the security and integrity of their personal and financial information. As a result, customers may withdraw their deposits, switch to alternative financial institutions, or demand stricter regulatory measures, impacting the bank’s long-term viability.

“I cannot comment on the Sierra Leone Commercial Bank’s alleged fraud at this time when the matter is under investigation. But generally, bank frauds can have broader economic implications. When fraud occurs on a large scale, it can destabilize the financial system and create adverse economic effects. Banks may face increased borrowing costs, reduced access to credit from other institutions, and tightened regulatory scrutiny. These factors can hinder economic growth, disrupt lending activities, and reduce investment opportunities,” he said, continuing that bank fraud often triggers legal actions and regulatory investigations, as in the case of the SLCB. “I am convinced that when the matter goes to court, those found guilty of fraudulent practices can face severe penalties, including fines, legal damages, and the loss of their operating licenses, should the bank be found wanting of a crime,” he noted, and continued that the occurrence of bank fraud can shake consumer and investor confidence in the overall financial system. “Individuals may hesitate to entrust their savings to banks, affecting the availability of funds for lending and investment purposes. This lack of confidence can hinder economic growth, restrict capital flows, and negatively impact financial markets,” the Retired Banker revealed.

The SLCB Company Secretary had however stated that “We followed due diligence. We tried our best to contact the other person before the transaction was done.” “We have records showing that one of the parties approved the withdrawals,” he said, and continued that the bank is safeguarding customers’ monies and following due processes.

It is now left with the bank to implement stricter compliance measures and internal controls, incurring additional costs to prevent future fraud.