ABSTRACT
The study is an empirical analysis of the impact of regulation and supervision on the activities of Nigerian Banks with emphasis on the role of the Central bank of Nigeria and the Nigerian Deposit Insurance Corporation. It evaluates the roles and contributions of CBN and NDIC to the Nigerian banking sector. Extensive field survey and library research was carried out and data collected were subjected to thorough analysis.
The analysis is shows that the supervisory and regulatory framework of the Central bank of Nigeria and the Nigerian deposit Insurance Corporation are not sufficient into guarantee effective banking practices in Nigeria. Other findings from the study include the need to increase the maximum insurance coverage due to the effect of inflation and the persistent fall in the value of the Naira, the need to disclose transactions continuously to ensure financial prudence through regular supervision and monitoring of the financial health of local banks with the aid of the “CAMEL ratings and other supervisory framework.
There is need to also increase the awareness of banking activities within the general populace through a deliberate integration process aimed at demystifying certain inherent perceptions of the public with respect to distress and the role of the Nigerian deposit Insurance Corporation (NDIC). Moreover, the public, investors and depositors were not fully aware of the activities of NDIC and CBN in liquidating and revocation of banks’ licenses due to the ineffectiveness of the enlightenment programmes used in carrying out the awareness.
The study focuses also on the consolidation agenda of the Central Bank of Nigeria and the processes, prospect and the challenges of consolidation. A questionnaire and telephone based research was adopted for the study and the data collated was tested using the chi-square analysis and supported by fundamental evidence from the database of the regulatory authorities.
Finally, the study offered suggestion as to how the problems so identified could be ameliorated.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
An advance-free fraud is a confidence trick in which the target is persuaded to advance sums of money in the hope of realizing a significantly larger gain. Among the variations on this type of scam, are the Nigerian Letter (also called the 419 fraud, Nigerian scam, Nigerian bank scam, or Nigerian money offer, the Spanish Prisoner, the Black money scam as well as Russian/Ukrainian scam (also extremely widespread, though far less popular than the former). Both the so-called Russian and Nigerian scams stand for wholly dissimilar organized crime traditions, they therefore tend to use altogether different breeds of approaches.
The 419 scam originated in the early 1980s as the oil-based Nigerian economy declined. Several unemployed university students first used this scam as a means of manipulating business visitors interested in shady deals in the Nigerian oil sector before targeting businessmen in the west, and later the wider population. Scammers in the early-to-mid 1990s targeted companies, sending scam messages via letter, fax, or telex. The spread of email and easy access to email-harvesting software significantly lowered the cost of sending scam letters by utilizing the internet. In the 2000s, the 419 scam has spurred imitations from other locations in Africa, Asia and Eastern Europe, and more recently, from North America, Western Europe (mainly UK) and Australia.
The number ‘419’ refers to the article of the Nigerian criminal code (part of chapter 38: “obtaining property by false pretences; cheating”) dealing with fraud. The American Dialect Society has traced the term “419 fraud” back to 1992.
The advance-free fraud is similar to a much older scam known as the Spanish Prisoner scam in which the trickster would tell the scam victim that a (fictitious) rich prisoner had promised to share (non-existent) treasure with the victim if the latter would send money to bribe the prison guards.
Insa Nolte, a lecturer of University of Birmingham’s African Studies department, stated that “the availability of e-mail helped to transform a local form of fraud into one of Nigeria’s most important export industries”.
Embassies and other organizations warn visitors to various countries about 419. Countries in West Africa with warnings cited include Nigeria, Ghana, Benin, Coted’Ivoire (Ivory Coast), Togo, Senegal and Burkina Faso. Countries outside of West Africa with 419 warnings cited include South Africa, Spain and the Netherlands.
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