Abstract
The project examines fraud management and performance of financial institutions in Nigeria. The study’s main objective is to know the magnitude of frauds in Nigeria banks and to know why and how banks personnel commit fraud. The primary source of data collection was used in gathering data from respondents. An empirical force affects the Nigerian banking sector, using the ordinary least square estimation (OLS) techniques called the exact AR Newton Raphson method. Data collected were presented in tables and percentages for easy understanding. It was discovered that within the period of review (2008 – 2013), an aggregate of five fraud cases were reported from the institution. It was also found out that the highest of the cases was foreign exchange transfer closely followed with that of interest computation and application of saving ledger account. It was concluded that adequate and close managerial supervision and control, regular accounts balancing were ranked as highly and most effective measures against fraud. It was recommended amongst others that there is need not to impose confidence to the extreme on employees, since human beings cannot be easily predicted.
CHAPTER ONE
INTRODUCTION
1.1Background to the Study
As in many other industries in the Nigerian economy, most banks are faced with problem of fraud. It might be a gross-over statement to call the Nigerian banking system citadels of frauds. Whilst, very truly, fraudulent practices are rampart in Nigeria the level (amount and number) of fraud is not unexpected of a developing and in experiencing banking system such as ours, it is so far to the credit of the Nigeria monetary authorities, the public at-large and perhaps any other concerned Nigeria that no bank has actually failed in Nigeria as a result of fraud. However, one should be disturbed by the regularity of fraud perpetration in our banks and effort should be made by all and sundry to make this bank to quite a reasonable extent of not totality.
The effect of fraud on our banks are far reacting a high height and they include; huge financial losses of the banks and their customer the depletion of shareholder’s fund and the banks capital base. Others are band management embarrassment and loss of confidence by the customers on our banks. The time, energy and money that would have been used in other development purposes expansion, customers, services and perhaps too, other social responsibilities, to the society-are diverted towards setting up fraud control and prevention system. These automatically increase running cost and most painfully, a major set back at the promotion of banking habit among out people.
Although, the monetary authority and all other concerned have been credited for the simple fact that no bank failed in this country as a result of fraud, it is worth nothing that record has it all, fraud had led to the closure of some banks in other parts of the world and this may take a position of the current trend is not solid. The job matter bank of affairs in great Britain and also the collapse of some banks in Kenya are very good examples, since the rate of occurrence has reached an alarming height and thereby causing a strong and urgent concern there is the need to put a final stop.
1.2Statement of Problem
Considering the effects of fraud and fraudulent acts as pointed out in the introduction, the purpose of this study is to effectively comb and curb the incidence of frauds in our banks using selected banks in Edo State. Among such banks include; Zenith Bank Nigeria Plc, Auchi and GT Bank Plc.
To achieve the objective of this research, the some problems need to be addressed, this include, why bank personnel commit fraud, how effective are fraud control measures in the banking system and the possibilities of setting sufficient information to predict fraud occurrence in banks.
1.3Research Questions
The following research questions are relevant for understanding of the study.
i. What is the magnitude of frauds in Nigeria banks?
ii. Why and how do banks personnel commit fraud?
iii. How effective are fraud control measures in our banks?
iv. What is the possibility of setting efficient information to predict fraud occurrence in banks.
1.4Objective of the Study
The main objectives of the study are:
i. To ascertain the magnitude of frauds in Nigeria banks.
ii. To know why and how bank personnel commit fraud.
iii. To ascertain how effective are fraud control measures in our banking system.
iv. To ascertain the possibility of setting efficient information to predict fraud occurrence in banks.
1.5Research Hypotheses
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