Question Tag: Bank Procedures

You are in charge of the Foreign Remittances Department of your bank. About a week ago, a certain man came to your office to enquire whether you have received any remittance on his behalf. When asked how much he was expecting he said the amount was USD 23, 745.00 from his brother in America, to which you replied in the negative. He had a few discussion with with you, gave you his name as well as cell phone number and left.

Three days after, you received a SWIFT message MT9 10 (confirmation of credit advice) with an amount of USD 23, 745.00 (from Citbank N.A. so you called him. He gave his account details of your bank’s branch at Somanya. Upon this you gave instruction for payment to be processed into his current account in local currency. Customer withdrew the funds as soon as it hit the account explaining to the branch manager that it was for a building project and had to quickly buy the building material before prices escalate. A week later, you returned from a meeting at Head Office to find a SWIFT message on your desk from Citbank N.A requesting for immediate return of the paid out USD 23.745 received under MT9 10 as it has been confirmed by the FBI as a fraudulent transaction. In fact, Citbank is urgently demanding authorization message from your bank to debit its Nostro account in settlement.

Required:

Explain what you could have done to prevent this from happening to your bank. Your answer should be a ten (10) bullet point format.

[Total Marks 20]