1.1 BACKGROUND OF THE STUDY
Fraud is whenever form is limitless in
classification. This is the more reason why courts and writers on fraud
haven / ways sly away from giving it a particular definition last
discuss it under whatever form it prevent itself, so here, there has
never been a single definition of term fraud. Not with standing the
varied meaning accepted to the concept of financial fraud the concept of
financial fraud the author address the subject with following working
Oxford and charison dictionary
simply define fraud as criminal deception. Act of decisive trick,
cheating swindling person on thing that dictionary defined fraud as an
act of deceitful behaviour for the purpose of gain which may be
perishable by law.
However in the mind of civil
court of justice fraud may be said to cover ill acts. Commission and co
concealment which involves a breach of legal or equitable duty trust or
confidence justly reposed and ingenious to another or by which in undue
advantage is taken of another.
Bunmi Fagbemi 1990, while
citing the dictionary of dictionary by penny, defined fraud to mean an
act or course of deception deliberately practiced to gain unlawful or
unfair advantage such deception directed to the detriment of another R.B
Awasanya widely see fraud any deliberate action in whatever form
(writer, spoken physical) designed to deprive a legitimate owners of his
/ her assets properties or rights further more, osboni’s concise law
dictionary say that fraud is obtaining of a material advantage by unfair
or wrongful means it involves more obliquity.
Then finally, Wole Adewumi
describes financial fraud as a conscious premeditated action of a person
thus the intention of the monetary gain thus having closely studies
these perspective one may correctly see bank financial fraud a
deliberate act by individual or group of finding within or without the
Nigeria banking system to cheat deceive, swindle or manipulate in order
to disposes the banks depositor / shareholders of their fraud fund.
Therefore, fraud or forgeries customer with a view to take benefit of the excess proceed or the shortfall.
Despite several definition of
fraud, the author believes that one so far given are rather appropriate.
Adequate and inspiring for the purpose in which the research work
intend to achieve. This is because they contain the basic of fraud which
v There must be deceit or deception directed to the detriment of another.
v A false representation has been made knowingly or without believes in its truth or recklessly whether it is truth or false.
v To obtain damage for deceit it must be
proved that the defendant intended that the plaintiff should act on it,
and suffered damages in consequence.
Thus every act of unfair
dealing whether against the back by its customer or by the third
parties, against the customer by the banks (including his officers) or
indeed against the bank by its officers really supposed to be included
financial fraud in our today’s banking system involves the use of deceit
and tricks and some times highly intelligent, cunning know – how the
action usually take the form of forgery, falsification of document and
authority signatures and outright theft.
A fraudulent act without
damage is not actionable but fraud is actionable if it deals to any form
of damage, which involves on gaining at the expenses of the other.
The position of banking system
in our economy cannot be over emphasized. The banking system houses the
central bank of Nigeria (CBN), the commercial banks the merchant bank
and the development bank. At the end of March, their were about eight
five 85 licensed bank 35 merchant bank and 5 development bank. These
banks occupy an indispensable position in the financial system in
particular and in Nigeria economy as a whole.
Fraud have been shown serious
bottleneck in the proper dispensation of the Nigeria bank roles and
function to the nation the efficiency of banking system as observed by
the customer has been degenerated overtime. People are becoming to get
worried and sooner than late may lose confidence in our banks today
fraud a common phenomenal in bank has perpetrated an agonizing influence
resulting in loss of confidence and trust in our banks by depositor
banks as the store house of public / people fund should be built on
trust not on fraud.
Definition of terms
The Webster’s English dictionary summarizes as deception of fraud as anything continued or intended to deceive.
There refer to the various fraud
activities that can take place in commercial establishment such as
manufacturing administrative organization and school etc.
When cash receipt from customer a is
misappropriated and the misappropriation is subsequently covered up by
recording cash received from customers B.
v Fraud detection
There is no perfection in our society or
environment everyone in any sphere of life or job function is expected
to be primarily conscious of his her environment
Is obtained or done by fraud, involving
fraud, make fraudulent insurance claims or it’s a deceitful or
dishonest, a fraudulent display of emotion
1.2 STATEMENT OF PROBLEM
This research work seeks to identify the
three major problems confronting the banking system. These are the
problem of fraud, long queues and delay and high incidental expenses.
To some banking experts, the issue of fraud is in intend in the Nigeria banking system
The argument on the is because
as they contended that a good number of fraud occur among out banks
without the knowledge of the outsiders and even of where the public is
aware, fraud does not effect the mood at which customers withdraws his
deposited money and nor does it relate to long queues and delays.
These experts are inclined to
believe this premises because that the nation is under banked, the
populace are at no option to use the available banks even if there are
glaring inefficiencies in their generation. The experts are of the view
that the problem of long queues and long delay in banking halls always
characterized the norm of Nigeria banking system other argue that long
queues and delay are as a result of incompetence and business among some
Another problem confronting
our banks today is the high incidental expenses occurring as a result of
amount spent on insurance premium paying action among the banks
workers. In fact, the banking industries have had the largest number of
strikes in recent years in each care, all the banks have lost their
traditional, if not valued customers in the process entries and
condition of service have been bought extra expenditure which have never
thought of while preparing the budget for the fiscal year.
Fraud has been paralyzed the
root of banking foundation, its base nad credibility just pick up a
national daily enquire from police record and you will be surprise at
the extent and magnitude of bank failure and fraud.
Today, the disbursement
mechanism function of our banking system has a lot of ditches militating
against its smooth operations.
1.3 PURPOSE OF THE STUDY
The research set out to achieve the following objectives:
v To determine if there are frauds in Nigeria banking industry
v To determine the cause of fraud in the operation banks in Nigerian
v To determine the effects of fraud in operation of bank in Nigeria
v To diagnose the bank procedure with the intent of fishing out the loopholes inherent there in and suggest ways of filing them
v To determine the various management
and government control devices geared towards eliminating or checking
financial fraud in out banking industry
v To offer recommendation and solution that may help in preventing or at least reducing fraud in our banking industry
1.4 SIGNIFICANCE OF THE STUDY
Although this research is not
comprehensive and exhaustive one as a result of the unavailability of
some vital information, limited some and financial constraints. All
aspect of the working is very relevant in one way or the other to the
Nigeria banking system as a whole
Here also, banks in Nigeria
will derive great assistance from the work in detecting fraud in their
and subsequently preventing or minimizing them.
This can be achieved by
adopting and implementing the various suggestion and recommendation made
in this study in their management control alert in the various possible
loopholes their establishment this lending to overall of funds and of
management, assets of the organization, for the advancement of
management overall goal and better output for Nigeria overall.
1.5 SCOPE OF THE STUDY
This research work met a lot of
difficulties as some workers of the banks were reluctant to give out
relevant fraud occurrence in their organization information were
gathered from few banks in Enugu.
Through there are fraudulent practices prevalent in most of the Nigeria banks
Secondly another problem
encountered in the course of gathering date, for this research is the
high inflation in the country.
The non compliance is as a result of the following.
v That such data on financial fraud is an official secret of the bank and should not made public
v That any attempt to disclose this official data will result in the lost of public confidence in the banking system
v That no banks live its competitors to
know how much it looser annually to fraud because it is a parameter with
which internal control efficiency is measured.