AN EMPIRICAL EXAMINATION OF FRAUD IN THE NIGERIA BANKING INDUSTRY (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)


AN EMPIRICAL EXAMINATION OF FRAUD IN THE NIGERIA BANKING INDUSTRY (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)

ABSTRACT

In fact, the main aim of this research work was to carefully examine fraud in the banking industry using one selected bank from commercial bank. The reason behind this is that all the banks are similar and any discovery made will be appreciable to all the banks operating in the country.

The research identified and expose the causes, the various forms of fraud and its tremendous effects on banks in general. It delved into determining the presence of a legal loophole in the Nigerian legal process that facilitates the perpetration of fraud. It also identifies the means of preventing or reducing the incidence of fraud in Nigeria's Banking operations.

Apart from this, in carrying out this research questionnaires were distributed to bank staff. The information gathered from the respondents were supplemented with oral interviews, personal observation and a review of some related books journals and newspaper.

The responses of the returned questionnaire were analyzed under statistical chi-square, statistical distribution tables of frequencies, percentages, pie chart and bar chart for the purpose of generalization and influences based on the variable studied.

The result showed that there was evidence of fraud in the Nigerian banking industry and that its presence has consequently culminated into a general public lack of interest in the banking industry.

Finally, from the foregone analysis, it is established that fraud reduces our economic development and the solutions proffered if carefully and fully implemented, it will go a long way to checking fraud in the banking operations.

 TABLE OF CONTENTS

Title page 

Acknowledgement

Dedication 

Abstract 

Table of contents 

Chapter One 

1.0 Introduction 

1.1 Background of the study 

1.2 Statement of the problems 

1.3 Objective of the study 

1.4 Significance of the study 

1.5 Definition of terms 

Chapter Two 

2.0 Review of Related Literature  

2.1 The concept of fraud 

2.2 Source, forms and causes of fraud 

2.2.1 Source of fraud 

2.2.2 Forms of fraud in the Nigerian ban king industry

2.2.3 Causes of fraud in the Nigerian banking industry

2.3  Detection of frauds in Banks

2.4 Prevention of frauds in banks

2.5 The effects and dangers of fraud

Chapter Three

Research Design and Methodology

Research Design

Date collection methods

Primary data 

Secondary data 

Research instruments 

Sources of data

Method of data collection 

Chapter Four 

4.0 Data presentation 

4.1 Data documentation 

4.2 Research strategies 

4.3 Research approach 

4.4 Measurements and sealing procedures 

4.5 Method of investigation 

Chapter five 

5.0 Discussion, Conclusion and Recommendation 

5.1 Discussion of finding 

5.2 Conclusion

5.3 Recommendation 

5.4 Limitation

References   

CHAPTER ONE

1.0 PRODUCTION 

1.1 BACKGROUND OF THE STUDY 

The mere pronouncement of the word, “Fraud”, before people sends a wave of doubts, curiosity, anxiety and concern in general in them as regards the satiety of their resources, be they financial or otherwise. Fraud is seen by people as an enemy, moreover on their own assets even when they themselves are cleaver fraudsters economy education agriculture, mining, production, banking etc. 

In the Nigerian banking industry, fraud is as old as the system itself, dating back to the period between 1982 and 1952 period commonly referred to as “free banking era” in Nigeria, when there was no form of banking act or ordinance to regulate the establishment and operations of commercial banks or a central bank to supervise and control banks within this period, expatriate and indigenous bank were established, all being commercial bank these banks were:

The African banking corporation in 1892 which later became the British of West Africa in 1893 and presently, the first Bank of Nigeria plc in 1894

The colonial bank in 1917 (Later became Barclays Bank dominion colonial and our seas, and presently the union bank of Nigeria Plc).

The British and French Bank (now the united bank of Nigeria Plc): all these being the expatriate banks and the indigenous ones being.

The National Bank of Nigeria 1933

The Agbomagbe Bank (now called Wema Bank in 1945)

The Africa Continental Bank Plc in 1974; and 

Other indigenous banks that failed following the introduction of banking ordinance of 1975 whose provisions they cold not meet. 

Some of these banks that were registered between 1892 never opened their doors for business even for a day while some simple collected customers deposits and vanished. Those that failed were for reasons traceable to fraud, mismanagement and lack of government patronage. The consequences were the depletion of the individuals and organizations concerned and the nation in general, funds needed for development and upliftment of living standards. This resulted to a loss of faith and trust on the banks hat tint he country. With the banking ordinance of 1952, some element of sanity entered the Nigerian banking industry which was noticed in the regulation of the formation, operations and activities of commercial bank in the country. Since this period and up to this present time, fraud has remained a permanent feature, a regular cankerworm and assuming grater proportions, different dimensions and sophistications day after day. 

Subsequent to the first banking ordinance in 1952, the central bank of Nigeria (CBN) act of 1959 and other acts and ordinances with their amendments from time to time which regulated and controlled the of the banking industry in Nigeria, the occurrence of fraud could not be helped either. Even now in the face of modern banking procedures with improved communication systems, computer technology and automated electronic gadgets and other precautionary measures by the banks, fraud has nevertheless been on the increase with its attendant misfortunes on its victims, “discoveries during investigation show that because of rampant incidents of fraud and forgery which a bank’s boss placed on he average of N1 million for working days of the year in Nigeria” it is noteworthy that a precautionary measure like this wastes customers a lot of man hours in the banks before ever they were paid their cheques, thus a defect in the quality of banks services. These customers get tired in the midst of the waiting crowd in the bank halls who on their own part pose yet some security threat to those who make withdrawals especially as the withdrawal is normally done before the full gaze of the crowd whom some members primary aim may not be known. Even with the long process of clearing, fraud could  not be minimized as those who perpetrate it are always clever, more sophisticated fraud schemes to circumvent the always installed control measures. 

Noting that the Nigerian banking industry is made up of central bank, commercial banks, merchant banks, development banks, people’s bank and community banks’ it is the aim of this research work to make an empirical examination of fraud in the industry of bank. 

STATEMENT OF THE PROBLEMS 

In our daily newspapers are incessant reports on frauds in Nigerian banks. For instance, business Concorde of January 23rd 1989 noted with various security measures, they still make nonsense of the various security measures in banks by employing scientific means of gaining access into their strong rooms. Also, business aims of January 27th 1989 amended that the rising incidence of bank fraud has created a lot of distrust between banks and their customers it is not only that there are reported cases of fraud but he sums lost are staggering. 

The Nigeria accountant, writing on bank failure observed that, “the historical framework of bank failure, will not be complete without adequate attention paid to the activities of fraudulent members of the board and staff” this thus expresses what harms fraud is capable of causing the banking industry. 

The methods used in perpetrating fraud are increasing in number and sophistication day-by-day. While the management of banks are busy devising means of checking fraud, the fraudulent staff are also busy devising new methods of duping the banks. Fraud used to an undesired loss of public funds and puts the integrity of the management of the affected banks in doubts. Every incidence of fraud drops off some degree of public confidence in the banking industry and slow down banking habit in Nigeria. 

In the light of this, if nothing positive is done to check these incidence early enough, fraud could lead to the liquidation of the banking industry in particular. The policy magazine, writing that banks should build a reputation which can encourage their customers, both existing and prospective, to transact with enthusiasm instead of reluctance. They should strive to rebuild the confidence of the public by satisfying its want both functionary and psychotically. This research work as a result concentrates purely on the banking industry with a view to providing suitable recommendations that will help on fraud prevention or minimization.

OBJECTIVE OF THE STUDY 

The objective of this research project is to carry out an empirical examination of the fraud in the Nigerian banking industry. The researcher having identified some of the problems attendant on fraud in the banking industry like insecurity of customers’ fraud for development and upliftment of living standards, loss of public confidence on banks, etc will now state the major objectives amongst others fro carrying out this research work. These include: 

To determine  if fraud exists in the Nigerian banking industry 

To determine the causes of fraud in the banks in Nigeria 

To determine if t here are legal loopholes in the Nigeria legal system that and fraud. 

To determine the effects of fraud on the operations of banks in Nigeria.

To proffer preventive measures and strategies against fraud so as to salvage the Nigerian banking industry as regards fraud menace. 

SIGNIFICANCE OF THE STUDY 

It is a fact that fraud has disastrous effect on banks and the economy in general. In the first place all aspects of this research work are very relevant in one way or the other to he Nigerian banking industry in general.

Moreso, bank in Nigeria will elative great assistance from this research work in detecting fraud in their business and consequently, thereby adopting and implementing the various suggestions and recommendations made in this study in their control systems. Also, this study will help readers and those who may be interested in carrying out further study, serving as a reference point from time to time. 

Finally, it cannot be over-emphasized the fact that if banks were all to reduce the incidence of fraud in their operations to the lowest level, the6y will be operating on a more profitable ground; the extinguishing public confidence on banks will once more be restored and economic revival achieve.  

DEFINITION OF TERMS 

Owing to the particular meaning and interpretations that are given to most of the terms used in this researcher work, it was considered worthwhile to define them as they relate to this work. 

Fraud: This is an intentional distortion of financial statements for whatever purpose and misappropriation of assets involving the use of criminal deception.  It is an act perpetrated to obtain an unjust or illegal advantage. 

Embezzlement: This is theft by a person, of assets entrusted to him / her. It involves converting to a person’s own use and benefit, a property entrusted to the  person’s care.

Misappropriation: This is the use of an asset for a purpose other than that which it is meant for.

Internal control system: This is the whole system of controls, financial and otherwise, established by management in order to carry on the business of the enterprise in an orderly and efficient manner, ensure ad hence to management policies, safeguard the assets and secure as much as possible the completeness and accuracy of the records. 

Inspection Unit: This is a unit established in a bank by the management as part of the internal control system, charged with the responsibility of detecting and or preventing errors and fraud by inspecting the records of the banks carrying out checks in some areas of the banking operations. It is different from the internal audit department.

Commercial Banks: These are banks that perform deposit collection functions and provision of commercial credits to and transfer of deposits. 

Community Bank: This is a self sustaining financial institution owned and managed by commercial group of communities for the purpose of providing credits, banking and other financial services to its members at the grass root level. Granting of its loans does not require collateral’s an indication of credit worthiness but self recognition and the credit worthiness of the loan applicant in the community.

Bank: This is the store house of a nation’s economy, a place where money and other valuables are kept for sage custody. 

.


TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM

Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.