A SURVEY OF FRAUD IN NIGERIA BANKING INDUSTRY

TABLE OF CONTENTS

TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGEMENT

TABLE OF CONTENT

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

1.2     STATEMENT OF PROBLEM

1.3     OBJECTIVE OF STUDY

1.4     SCOPE OF THE STUDY

1.5     LIMITATION OF STUDY

1.6     DEFINITION OF TERMS

CHAPTER TWO

2.0     REVIEW OF RELATED LITERATURE

2.1     VARIOUS DEFINITION OF FRAUD

2.2     FORMS OF FRAUD IN NIGERIA BANKING INDUSTRY

2.3     CAUSES OF FRAUD IN NIGERIA BANKING INDUSTRY

2.4     EFFECTS OF FRAUD IN NIGERIA BANKING INDUSTRY

2.5     THE LAW RELATING TO THE LEGAL PROCESS OF PROSECUTING FRAUD IN BANKS

CHAPTER THREE

3.1     FINDINGS

3.2     RECOMMENDATION

3.3     CONCLUSION

          REFERENCE

CHAPTER ONE

1.0     INTRODUCTION

1.1     BACKGROUND OF THE STUDY

          It will not be easy to say the exact date fraud began in the Nigerian Banking Industry.

However, we are going to have a look at dates of the establishment of the first two indigenous banks in Nigeria as this will help us to trace the origin of some loopholes which bring about fraudulent practices in Nigerian banking system. The National Bank of Nigeria was establishment in 1933, the Agbomgba bank (now Wema Bank) was established in 1945 and the African Continental Bank was established in the year 1947.

          Prior to 1952, there was no banking regulation to monitor the activities/operations of the Commercial Banks in the country as a result of this there was lapses in the banking system.  For instance, some banks got license for operation but did not open one day for business.  Some opened, collected money from their customer and vanished or wound up, due to these fraudulent acts, the first banking Act was enacted in 1952 and subsequently in 1959, the Central Bank Act was enacted to monitor the activities/operations of Commercial Banks in the country with the view to reducing bank fraud.  But it rather seemed to stimulate the occurrence of fraud in those Bank because for the decade fraudulent practices have been on the increase and this call for a review or critical evaluation of some at the “Act”, we now hear of cases of bank, been distressed, “Advanced free fraud” “419” and so many other fraudulent practices all in our banking industry.

          In writing this protect, the area/state chosen for the study is Enugu and the bank of interest is Orient Bank Plc.

1.2            STATEMENT OF PROBLEM

Fraud is now a household word in Nigeria, because hardly can

a day pass by in Nigeria without a reported case of fraud in our industries, especially the banking sector.  This has brought a lot of worries to prominent investors, the government and other interested parties we now live in an era of distrust amongst banks and their customers.  The Business Times of January 23 1995 had it that “the rising incidence of bank fraud has created a lot of distrust between banks and their customers”.

          More also, there was a report in the Daily Champion of January 29 1995, that a bid to defraud a bank of N1,000,000 failed.  We also heard what happened in Orient Bank Plc., Enugu late 1992 – in fact the report seems endless and we cannot maintain all.

          As a result of this issue of fraud day-in and day-out, the management of various banks are trying everyday to devise means of putting an end to bank fraud, while also some fraudulent staff are reinforcing themselves towards improving their techniques to defraud banks.

          If this unfortunate phenomenon is left unchecked the banking industry will be in mess and a shadow of it selves in the near future, it will have adverse effect on the general economy since most business can not be effected without the bank acting as a mediator.

1.3            OBJECTIVES OF THE STUDY

The purpose of this research is among other things:

a.                 to determine if there are fraud in Nigeria banking industry

b.                 To find out and discuss forms of fraud in Nigeria Banking Industry

c.                  To find out the causes of fraud in Nigeria Banking Industry.

d.                 To have a look at the effects of fraud on the Nigeria Banking Industry in particular and the general public at large.