OVERVIEW AND IMPACT OF FRAUDS Banking and Finance Project Topics

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            Fraud is an awful phenomenon, which like a view has invaded Nigeria banking industries and the society in general, and puts any organisation that is comes into in a distress point of in a state of liquidation.

            This study highlights the nature and various types of fraud, causes of bank fraud extent of fraud in banks, effect of bank fraud, detection and control measure 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 Nigeria banks to know whether Nigeria practice, aid or abate fraud and to consider the adequacy of the internal control system in detecting and preventing fraud in the bank.

            The method of data collection includes journal, textbooks and past work.  The findings revealed that compensation of banking services and the maintenance have 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 elaborate effect between banks, their customers, the public and the government.  Fraud in the banking system should as much a possible be minimized as it kills the bank and destroys the economy of a nation.

            Finally the research work adduced that continuous vigilance should be the watch work if fraudulent practices are to be reduced and possibly eliminated in the banking industry.




            With an award match to becoming on industrialized nation, Nigeria is witnessing true emergence of human resources as professional, which made possible the establishment of service industries and other business organizations.  This belief was rather too strong that the urge to provide financial services can no longer be overlooked.  To accelerate economic growth and economic development both government and some organized private groups were issued license to operate banks, in addition to a few banks that were already into business to operate systematic financial services.

            This bank employed young men on women, but like every aspect of human endeavour have their challenges.  One of the major challenges facing the banking is the incidence of fraud.  Bakere (2002.1) observed that the incidence of frauds in the banking industry has in the recent, past posed a very serious threat to the very existence of financial institutions and is a matter of services concerned to the regulatory authorities and the banking public.  Despite the stringent measures put in place by monetary authorities and internal control measure to check the activities of fraudsters, frauds in the banks to be on the increase.  Edozie as observed by Adebayo (2001.5) stated that available statistics reveal that thirty-one banks reported that they experiences frauds and forgery cases for the period (January – March 2002).

            Banks are institution known to operate on the center-pin of public confidence.  Today that concept no longer holds as bankers themselves either frauds or partakes deeply in fraudulent activities against her banks (employers).

            According to Nigerian Deposit Insurance Corporation (NDIC) Annual report (1997.9) most of those banks were run around by a few greedy directors and officials who perpetrated frauds and all kinds of unethical practices against their institutions to erode public confidence in banks.

            This scenario has singularly contributed to the liquidation of many banks Agbata (1998:13) observed that one couldn’t avoid considering the fact that the distress in the bank industry was occasioned by fraud.

            Now that cases of fraud has been established in the banks the need therefore aisle to find out problems associated with fraud, its input on the macro-economy and how these problem are being tackled, hence the need for this study.


            Generally speaking movement in the economy of any nation result from the inter-play of money and other economic variables in Nigeria the impacts of money and banking have been the dominant factors determining macro-economic performance.  Despite this unique position of banks between other sector of the economy, banks (especially commercial banks) are faced with a good number of economic crises notably among the fraud.

            As a result there has been a lot of criticisms from the investing public about the non-commitment and dedication to duty by Nigerian bankers.  This stands form the fact that distress in the banking industry originated from fraud, which was occasion by bankers.

            Directors and management of banks are also criticized for their inability to direct and control men and materials effectively.  Poor accounting on reconciliation procedures may give an employee the opportunity to spot a weakness and devise a plan to take advantage of it.  This is due to the weakness of internal control in a bank.  Understanding what motivates this individuals and how they are able to reationalize their behaviour is key to preventing it.  Further more, they are criticized for using their positions and authorities to defraud their institutions.  Repeated appeals and warning from well-meaning individuals and government for a change of these negative tendencies to the position have yielded little or no dividend.

            Criticism has not been directed to bankers, board of directors and management alone.  Government and regulator authorities are criticized for appointing men of doubtful integrity to oversee the affairs of banks and failing.  In their statutory role of supervision.  While fraud have been in vague in the banking or financial institutions.  The situation worsened when even those who should monitor and control fraudulent practices became the offenders.  This is why the failed bank decree on frauds was targeted at the industry.

            Many banks became technically distress, the member increasing from eight (8) in 1990 to forty two (42) in 1994 and fifty two (52) by the end of 2002.  This is due to inefficiency management and it has caused this menace to be inevitable in every banking industry or financial institution.

            Many concerned citizen see these solution as contributing to the poor performance of banks as evidence by distress in the banking system.

            It is in recognition of these problems that this study seeks to investigate into the problems associated with and in the banking industry and the roles which regulatory authorities should play to rectify this ugly trend to enhance effective financial system.

This material content is developed to serve as a GUIDE for students to conduct academic research

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