The National Australia Bank board was made aware an alleged fraud ring operating within the bank in western Sydney was damaging its customers months before it reported it to the corporate watchdog, the banking royal commission has heard.
The commission heard on Wednesday that nearly 40 staff members were involved in the scheme to organise mortgages for people who would not otherwise have qualified for the loans, to pump up their sales figures.
NAB’s head of broker partnerships, Anthony Waldron, again took to the witness box to explain the bank’s issues with its introducer referral program.
Photo: Jason South
Of the 2000-plus suspect loans drawn up by the group, more than $50 million were deemed to be potentially unserviceable by the bank, the commission heard.
NAB’s “introducer” referral program used members of the public, including a gymnasium owner and a tailor, to help push its loan products, the commission heard. The gym owner, the tailor and two other “introducers” were together responsible for $139 million in loans.
The alleged fraud ring included six branch managers and up to 33 other staff, the commission heard. NAB sacked about 20 staff members and took disciplinary action against many more in December 2015 after it emerged the cabal had drawn up thousands of loans that were underpinned by false information including fake IDs and payslips.