FRAUDS IN THE BANKING INDUSTRY AND PERFORMANCE OF DEPOSIT MONEY BANKS

ABSTRACT

The   research   is   on   the   management   of   fraud   in the Banking Industry and Performance of Deposit Money Banks. The main objective of the study is to identify the causes of fraud in Banking Industry. The researcher analyzed the data collected based on the response from the questionnaires distributed

The major findings of the study are:

1.    The causes of frauds in commercial bank includes

a.   Poor management and poor security arrangement

b.    Inadequate staff training

2.    The various types of fraud in commercial banks include:

a.    Loan fraud

b.    Cheque fraud

c. Advance fee fraud. On the basis of the above findings, the study concludes that management of fraud in commercial banks is of the great importance and has a lot of benefit which includes given confidence to the bank customers that their money is safe, encouraging or attracting local or foreign investors. Based on the finding, it is recommended that:

a.    Government   should   establish   more   anti-fraud   and   anti-corruption   agencies   to   assist   in   sanitizing   the   Nigerian banking system.

b.    Bank’s   management   should   employ   strategies   that   will ensure early and prompt detection, prevention and control of fraud in commercial banks.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Over the years, irregularities have been the problems of commercial banks. The term irregularities are used to refer to intentional     distortion     of     financial statement     and misappropriation of assets for whatever purpose. Fraud is one type of irregularities. Fraud, in auditing guideline, is used to refer to irregularities involving the use of criminal deception to obtain unjust or illegal advantages. Fraud may entail that proper accounting records have not been properly maintained, it may also point out that some internal control system are not effective and could not form   a   reliable   source   of   information   for   an   auditor.  Existence of fraud in a financial statement endangers it from showing  a  true  and  fair  view  and  complying  with  the provision of the companies and Allied Matter Acts (CAMA) 1990. Therefore, fraud in banks must be looked at generally as “acts that involves the loss of assets by banks through dishonest and deceitful means. The fraudster intentionally but dishonestly benefit himself to the detriment of the bank, the bank staff, bank customers and any other member of the public via banking operations. Fraud can be committed by bank staff, bank customers or a third party that is noncustomer (Eze, 2004).

1.2   STATEMENT OF THE PROBLEM

Fraud in the Banking Industry  has  been notable and has remained an unavoidable problem and has resisted all practicable treatment. This incidence has not only become an incessant phenomenon but also been on the increase in the recent past. In recent years, the volume and frequency of fraudulent practices  in  Nigeria  banks  have  been  on  the  increase. According  to  the  Nigerian  Deposit  Insurance  Corporation (NDIC), the level of reported fraud in Nigeria banks rose from N 804m in 1990 to N3, 199m in 1998. Furthermore, the actual/expected loss to the amount involved in fraud rose from  3  percent  in 1990  to  22  percent  in  1998.  This is evidenced  in the report, which is the highest fraud ever reported in any particular  year by a Nigerian bank  in 1998, when united Bank for Africa Plc wrote of N786m on account of fraud. The growing scope and scale of fraud in the Nigerian banking industry is surprising and the general confidence reposed in the banking institutions has become eroded since the new concept of distress, bank failure and closures in the recent  years.  From  available  records,  out  of  about 114 financial institutions operating in the country as at 1996, 52 were distressed while 6 were acquired. With the frequent fraud, people are no longer at ease keeping their monies in the commercial banks but instead prefer to keep them in their houses or prefer to hold them in wares. The  commercial  banks  shares 90%  of  all  cases  of malpractices, forgeries and frauds (Wikipedia 2007).

TOPIC: FRAUDS IN THE BANKING INDUSTRY AND PERFORMANCE OF DEPOSIT MONEY BANKS

Format: MS Word

Chapters: 1 - 5, Abstract, References, Questionnaire
Delivery: Email

Number of Pages: 90

Price: 3000 NGN

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