Contending The Rate Of Fraud In The Banking Industry

CONTENDING THE RATE OF FRAUD IN THE

BANKING INDUSTRY

ABSTRACT

          Much thought and research are increasingly being directed at the tudy of causes of fraud in banks, because of it’s effects on banks and finance industry generally.

          No reliable statistics exist (in any public report so far) on the value of successful and frustrated fraud in the banking industry.

          The facts presented in this research are the first of their kind on the study on how the rate of fraud on the banking industry is to be contended the research delved into different issues on sources of fraud, types of fraud, causes of fraud, effects of fraud on the business of banking and the effectiveness of fraud preventive measures.

          The detection and prevention of frauds should be elaborative effect between banks, their customers and the government frauds in the banking system should as much as possible be eliminated as it kills the bank and destroys the economy of a nation.

TABLE OF CONTENTS

TITLE PAGE                                                                II

APPROVAL PAGE                                                     III

DEDICATION                                                               IV

ACKNOWLEDGEMENT                                             V

ABSTRACT                                                                  VII

TABLE OF CONTENTS                                             VIII

CHAPTER ONE

1.0       INTRODUCTION                                                         1

1.1    BACKGROUND OF THE STUDY                    1

1.2       STATEMENT OF THE RESEARCH PROBLEM2

1.3       OBJECTIVES OF THE STUDY                       3

1.4       SIGNIFICANCE OF THE STUDY                    4

1.5       LIMITATIONS OF THE STUDY                       4

CHAPTER TWO

2.0       REVIEW OF RELATED LITERATURE           7

2.1    DEFINITION OF FRAUD                                  7

2.2       SOURCES OF FRAUD                                     8

2.3       TYPES OF FRAUD                                           10

2.4       CAUSES OF FRAUD                                        13

2.5       EFFECTS OF FRAUD ON BANKS                           15

2.6       DETECTIVE, PREVENTIVE AND

CONTROLLING MEASURES FOR FRAUD IN THE BANKING INDUSTRY                                             16

CHAPTER THREE

3.0       RESEARCH MYTHOLOGY AND DESIGN    22

3.1    SOURCES OF DATA (SECONDARY ONLY)          22

3.2       LOCATION OF DATA                                       23

3.3       METHOD OF DATA COLLECTION                23

CHAPTER FOUR

4.0       FINDINGS                                                          25

CHAPTER FIVE

5.0       RECOMMENDATION AND CONCLUSION   27

SUGGESTION FOR FURTHER RESEARCH         29

BIBLIOGRAPHY                                                          31

CHAPTER ONE

1.0                                 INTRODUCTION

1.1    BACKGROUND OF THE STUDY:

          Banks are institutions known to operate on the center pin of public confidence.  Today that concept no longer holds as bankers themselves either initiate fraud or partakes deeply on fraudulent activities against their banks (employees).

          According to Nigeria Deposit Insurance Corporation (NDIC) Annual Reports (2001) most banks were run a ground by a few greedy directors and officials who perpetuated frauds and all kinds of unethical practices against their institutions.  This is an aberration that continues to erode public confidence in banks.

          This scenand has contributed to the liquidation of many banks.

Since it is observed that one cannot avoid considering the fact that the distress in the banking industry was occasioned by fraud, the need therefore arises to find out problems associated with fraud, it’s effect on the economy and how there problems are to tackled.

1.2    STATEMENT OF RESEARCH PROBLEM

          Though the banking industry is one of the most profitable institutions within the economy, higher performance could be attained in terms of their private returns and obligations to the society.

This must be so if the banking industry is to perform a leading role on reactivating the economy.

          The suboptimal performance of the Banking Industry is due to problems.  Of these problems, the issue of fraud in the banking industry is one of the most intractable and involvemental.  The magnitude of this problem and it’s implications for the industry has inspired this research on “contending the rate of fraud in the Banking Industry”.

OBJECTIVES OF THE STUDY

          The primary objective of this research is to find practical means of minimizing the possible eliminating the incidence of fraud in our banks.

          To achieve this objective the following secondary objectives have been specified.

i.             To identify the cause (s) of fraud in banks

ii.            To identify the types of fraud perpetrated in banks

iii.           To determine the effects of fraud on the business of banking

iv.          To recommended measures for reducing the incidence of fraud in the banking industry.

v.           To identify the means through which the recommended measures can effectively be implemented

vi.          To know why bank personnel commit fraud .