In summary, the aim of conducting this research work is to investigate into the
causes of the alaming rate of bank fraud in Nigeria, identify the effects, and
suggest possible solutions towards achieving fraud free banking in Nigeria.
Accordingly the acts which constitute fraud are inexhaustible. But prominent
among them is forgery. Generally, employees, all have the fraudulent practices.
However, untrained staff and those bank staff who now occupy top positions
through experienced have a lion share of defrauding banks, when verified with
any known bank fraud.
The major cause of fraud is frustration. However, numerous financial
commitments were the constraints inhibiting promotion and reward.
Most of the frauds that went undetected, were the architects of dishonest
Frequency of fraud in banks is on the average the hardly would a fraud succeed
without a bank staff.
Therefore, effective supervision is the bedrock for solution. Fraud may result
in the loss of confidence by the public a decade, bankers resist at all times,
and it has no correlation to a particular section of the banks.
However, a situation where gold watches are usually given, is inadequate for
TABLE OF CONTENTS
Significance of the Study
Various forms and nature of bank
Causes of bank fraud
Effects of bank
Techniques of fraud control in
1.1 STATEMENT OF PROBLEM
The occurrence of fraud in many
Nigerian organizations in becoming too predominant, especially in the banking
industry. According to Anyanwu (1993), bank fraud entails a conscious or
deliberate effort aimed at obtaining unlawful financial advantage at the
detriment of another person who is the rightful owner of the fund.
However, Orjih (1998), stated
that increasing incidence of frauds and forgeries in banks in recent years, if
not arrested might pose certain threats to the stability and survival of
individual banks and the performance of the industry as a whole.
So, what exactly are the causes
of bank fraud? Could it be from the side of the bank staff or the customers? Or
could it be from both parties? Who bears the incidence of fraud? And how
can the occurrence of fraud be minimized and if possible be prevented?
Therefore, the researcher
intends to investigate on the causes and incidence of bank fraud, as well as
obtaining possible measures of minimizing or preventing the occurrence of
1.2 RATIONALE OF STUDY
Actually, fraud cannot easily be totally eradicated in Nigeria banks, but the
rate of fraud can only be minimized. So, it is of this reason that the
researcher has actually seen the situation which the country is facing as a
result of this problem.
The researcher actually has seen this problem as one of the problems the
society is facing and decided to seek for a way out of this problem. Now the
question is why do we still experience fraud after all provision made to
control fraud in our society. In our bank we have internal and external
auditors, shifting of staff from one department to another penalties for
fraudulers etc. Despite all these measures to minimized or control fraud we
still experienced fraud. The question now is how do we control this ugly
situation the society if facing. So, come out with the following rationales
To know what is actually bank
To know also various forms and
nature of bank fraud in Nigeria
To know element that facilitate
To know effects of bank fraud
in the economy.
Finally, to give situations on
how control bank fraud in Nigeria.
1.3 SIGNIFICANCE OF THE STUDY
This research will be of great important to both the government and financial
Government: The money spent by Nigeria deposits insurance co-operation (NDIC)
will be reduced on liquidity banks if fraud can be controlled among Nigerian
banks. This is so because whenever a bank liquidates in Nigeria it will lead to
bank failure and such will amount to more expenses on Nigeria Deposite
On the side of banks, they will equally benefit from this research, since it
vividly gave solution to the problem of fraud in Nigeria.
Bank customers will equally benefit from this research as this research will
prevent fraud in Nigeria, thereby making customers fund to be safeguard without
banks getting distressed.
Students will at the same time benefit in this research work. The research will
help them to make more enquiries to problem relating to bank fraud in Nigerian.
1.4 DEFINITION OF TERMS
According to the Oxford Advanced Learners’ Dictionary of current English, the
word fraud simply means criminal deception. This definition is straight forward
and very brief.
Perhaps, the meaning and explanation which I consider more elaborate is the
definition offered in Hamlyn Encyclopedic world Dictionary. According to this
great master dictionary, the word ‘fraud’ means ‘deceit, trickery, sharp
practice or beach of confidence, by which it is sought to gain some unfair or
dishonest advantage,…any deception, artifice or trick”.
In other words, based on these definitions put forward above, it means that any
act exhibited by someone by which it is pursued towards gaining undue and
non-meritorious credit at the detriment of the right beneficiary, constitutes
an act of fraud. However, it is the authors view that an ct of fraud is never
committed, unless the intention of the perpetrator was present at the time of
execution of the dubious plan. Therefore, any illegal fraud which does not meet
this test, must be construed and interpreted as aiding and abetting fraud.
There are, in fact, several ways fraud can be committed, like by duress, for
example, where a dishonest bank manager tells one of his staff to “rock deal in
the bank within two years”, (so that both of them should share inter).
Otherwise he, the manager will write the head office about the staff ‘redancy
for the purposes of laying-off. If such a staff lacks understanding and
sense of judgment, having received his manager’s instruction, he may “rock the
deal” and only to discover later on, that he is in soup. The manager may escape
inhurt, where the plan leaks, and such a staff may not even have the courage to
mention his colleague during interrogation by the police.
Hardworking managers might contest the possibility of this occurrence, but
experience has show that an illiterate and down-to-earth staff is capable of
doing anything, provided it receives the managers’ approval. The possibility of
the occurrence is undebtable, after all, no person has the exclusive
responsibility of defrauding a bank.
Therefore, bank fraud is understood to mean, an intentional and criminal
deception by the perpetrator, which is sought to gain some unfair, unpleasant
and dishonest advantage.
But, in the eye of a practicing
banker, any record made by a bank official or group of bank officials in a
customer’s account which was performed, resulting the payment of an amount by
the bank to a wrong and fictitious hand, with a view of gaining unjustifiable
advantage in preference to the rightful owner is termed fraud. Even though that
bankers have no exclusive dictionary of their own, they still maintain
that no bank fraud can succeed without a bankstaff. This sharp recognition, for
example, is evident in the African Continental Bank – General managers message,
where he started interalia.
“One the banking scene, the industry has continued to witness increased number
of frauds with varying degree of sophistication. We at ACB have had our
own share of the problem. However, no fraud in any bank can ever succeed
without collusion of some people within the bank”.
a) Fraud: This simply means decrepit,
trickery, sharp practice or breach of confidence of which it is sort to gain
some unfair or dishonest advantage over someone.
b) NDIC: This means Nigeria deposite
insurance corporation. It is a body that regulate every banking institution in
Nigeria and insures their customer deposit against bank failures.
c) Banking Industry: There are
institutions that deals on financial transaction of deposite acceptance and
payment, and transfer on fund surplus end to deficit end.
d) Bank Customers: This refers to
anyone who has or maintain regular account such as current, savings ad fixed
deposite account with any commercial bank.
e) Bank Penalties: Punishment meant for
any earning staff of worker of a bank.
f) Effect: Outcome of an event.
TERMS AND CONDITIONS APPLY
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