Development Bank strengthens anti-fraud reporting

The Development Bank of Namibia (DBN) has strengthened its fraud reporting mechanisms, says Senior Manager: Corporate Commu- nication, Jerome Mutumba.

In terms of improved fraud reporting, the Bank has outsourced its reporting channels to local auditors Deloitte. This step was taken to ensure that potential whistleblowers feel that they can report fraud in a neutral environment. Says Mutumba, the Bank has become aware of the global phenomenon that whistleblowers are wary of making reports for fear of victimization. In order to adhere to global best practices, and in adherence with the new Whistleblowers Act of 2017, the Bank has adopted the new mechanism.

The benefits of the new system are that whistleblowers can report anonymously, in a neutral environment. This applies to the public who may believe that DBN resources are being misused, as well as to staff within the Bank.

Says Mutumba, the Bank is both ethical, and holds itself accountable for capital placed under its stewardship. In light of this, the Bank is taking proactive steps to prevent misuse of its funds. Not only is fraud reporting expected to expose attempted fraud, but it will also deter it by creating an environment that is hostile to abuse

On the topic of the types of fraud that the Bank is alert to, Mutumba says there are three forms at stake.

The first is corruption, which commonly consists of bribery, conflicts of interest, illegal gratuities (kickbacks) and economic extortion in which a service is withheld before payment is received.

The second is asset misappropriation, which consists of theft or misuse of assets, including cash. This might also include fraudulent disbursements or misuse of payments received from the Bank.

The third is statement fraud, in which a borrower or potential borrower understates or overstates assets in order to present a false ap- pearance which can influence treatment of applications and management of accounts after borrowing.

Mutumba goes on to say that the potential for fraud is well-managed by the Bank’s Risk and Compliance function, as well as with checks and balances during the application process. He adds that during the application process, assessment of proposals is done by three independent committees. Post borrowing, accounts are monitored for deviation from terms. In addition, various functions of the Bank observe borrowers and enterprises in situ.

The Bank is determined to hold itself accountable, and to achieve this, it will continue to review its mechanisms and adopt best practic- es as they become apparent, he says.

Mutumba concludes by calling on any member of the public who has evidence of any form of fraud perpetrated against the Bank to use the anti-fraud communication channels. More information on reporting can be found at www.dbn.com.na

The Development Bank of Namibia (DBN) has set the record straight that it has no plans to transform into a commercial banking institution or fully take over the mandate of the now liquidated SME bank. This comes after the Bank published an expression of interest for the provision of a core-banking system which ignited speculation that DBN might be on a transformative phase.

The Bank’s senior communications manager, Jerome Mutumba confirmed that the need for a core-banking system arose as a matter of improving the bank’s systems.

“DBN has no intention of evolving into a commercial bank. The core banking system has nothing to do really with whether you want to become a commercial bank or a development finance institution or anything. Most organisations have an IT system that they use and I think you have heard of SAP for example. It’s a very common one. It cuts across industries, most businesses actually use it,” he said.

DBN has been utilising the SAP model and a review carried out on the system brought the Bank to identify the need for software that takes care of all gaps that are pertinent to its core-needs without introducing any further costs. 

“So what happens is that you look at the nature of your business then you look at the IT system that you have, whether it has models that takes care of the core functions that you want. So when you identify that there are some gaps and limitations, you go out into the market and see if there is a system that more or less can give us a tailor-made model of what we are actually looking for,” said Mutumba.

DBN is currently sourcing a core banking system that has the following features, core banking foundation, customer relationship management, loans management, financial management and information management.

“If you look at the features that we are sourcing, there is nothing that has to do with deposit taking or anything like that. So even if we can use a system that the commercial bank is using, we will not use those models that the commercial bank uses when they are taking deposits, ATMs or anything like that because we do not do those”

“We only stick to those models that are relevant to us, loan book management and other stuff that we are actually looking at. That we are turning into a commercial bank is out of the picture. And those comments that we saw people making, sometimes people want to lead a conversation that they do not necessarily understand. The tender is very clear, it says we are looking for those particular models,” he emphasised.

He added, “The SME Bank was a fully fledged commercial bank while the DBN is a development finance institution. It does not have a commercial banking license. It is not regulated by the central bank, SME Bank was regulated by the central bank because it was taking.”

Transforming into a fully-fledged commercial bank goes beyond merely changing IT systems into fundamentally changing the law that speaks to its mandate, Mutumba said. “DBN has a mandate that is drawn by law so in order for us to become a commercial bank we need to change the law and take it away from the space of a development finance institution,” he said.