OVERVIEW AND IMPACT OF FRAUD IN THE BANKING INDUSTRY IN NIGERIA (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)

ABSTRACT:

Fraud is an awful phenomenon, which like a vein has invaded Nigeria banking industries and the society in general, and puts any organization that it comes into in a state of liquidation. This study highlights the bank fraud, extent of fraud in banks, effects of bank fraud, detection, and presentation and control measures adopted by management to check fraud incidents. This study highlights the nature and various types of fraud, causes of bank fraud, extent of fraud in banks, effects of bank fraud, detection, and presentation and control measures adopted by management to check fraud incidents. The purpose of this research work is to find out whether there is significance level of fraud in Nigerian banks, to know whether Nigerians practice, aid or abate fraud and to consider the adequacy of the internal control system in detecting and preventing fraud in the bank. Hypothesis were formulated and tested with chi-square and inference drawn there from. The collection includes a well-structured and easy to follow questionnaire. Primary data were collected through this medium from 30 respondents. The findings revealed that compensation of banking services and the maintenance of effective internal control mechanism has helped to reduce the incidence of fraudulent activities in the bank. In view of this, it is the recommendation that adequate internal control system should be maintained, effective fraud management, strict adherence of administrative management policies should be ensured to check and possibly eliminate fraud incidence in the bank. The detection and prevention of frauds should be elaborative effect between banks, their customers, the public and the government. Frauds in the banking system should as much as possible, be minimized as it kills the bank and destroys the economy of a nation. Finally, the research adduced that continuous vigilance should be the watch work if fraudulent practices are to be reduced and possibly eliminated in banking industry.

TABLE OF CONTENT

CHAPTER ONE

1. BACKGROUND OF STUDY                                                1

1.1    OBJECTIVES OF THE STUDY                                 3

1. STATEMENT OF THE RESEARCH PROBLEM     4
2. SIGNIFICANCE OF THE STUDY                              7
3. SCOPE OF THE STUDY                                           8
4. LIMITATION OF SCOPE                                            9
5. STATEMENT OF RESEARCH HYPOTHESIS                 9
6. DEFINITION OF TERMS                                            9

CHAPTER TWO

1. REVIEW OF RELATED LITERATURE                     13

2.1    CONCEPT OF FRAUD                                                        14

1. SOURCES OF FRAUD                                              17
2. CAUSES OF FRAUD                                                  19
3. TYPES OF FRAUD                                                     26
4. IMPACTS OF FRAUDS IN NIGERIA –

BANKING INDUSTRY                                                          35

1. EXTENT OF BANK FRAUDS                                    40
2. THE LAW AND FRAUDULENT PRACTICES                   46
3. DETECTION, PREVENTION AND CONTROL –

OF FRAUD IN BANKING INDUSTRY                       49

1. THE RELATIONSHIP BETWEEN BANKERS AND CUSTOMERS                                                            57

CHAPTER THREE

3.0    SUMMARY, CONCLUSION AND RECOMMENDATION

1. SUMMARY OF FINDINGS                                         59
2. CONCLUSION                                                             63
3. RECOMMENDATIONS.