ABSTRACT

 Fraud is gradually becoming rampant and a daily occurrence in our banking industry, while the bank management are busy working out means of detecting, checking fraud, the fraudsters on the other end are busy designing new method of circumventing those measures in conjunction with some dishonest bank staff. It should be pointed out that effect destabilizes banks not only that, hinders growth of banks and attaining their aims and objectives or goal. Hence we have good numbers of banks that were distress, acquired by other banks and merged with other banks in the country in the present 21st century. The menace ranges from falsification of entries, forgery of signature of account holders, spurious letter of credit, cash theft by bank cashiers, telex fraud, collusion in issuance of loans, manipulation of financial data, misrepresentation of automated teller machine (ATM), to mention but a few.  The objectives of this research work therefore to carry out survey and investigation on the major causes of fraud and their effect on the Nigeria economy with reference to Ecobank plc, union bank plc, Skye bank plc, keystone bank plc, stanbic IBTC and united bank for Africa plc (UBA).The project also evaluated various forms of fraud and malpractice that can be in existence, relating to this project in examining the problems, the researcher used both primary and secondary data. In conclusion, the researcher believes that this study has somehow achieved its predetermined aims and objectives by identifying various ways by which frauds and malpractice and possible ways of preventing them. Finally, this report is primary a prelude to the student undertaking similar work in related discipline as the writer due to the constraints encounter could not go beyond this scope. This project finally worked out ways of preventing or reducing the above problems.

CHAPTER ONE

1.1 …

1.1         STATEMENT OF THE PROBLEM

Banks has continued to witness increased number of fraud and malpractice with varying degree of sophistication. It was reported by the Nigeria Deposit Insurance Corporation (NDIC) that “Banking Industry has lost billions of naira to fraudulent activities, indicating a continuing increase in banking fraud” in the present 21st century in Nigeria.

This shows that while bank management are busy working out means of checking fraud and malpractice fraudsters on the other hand in conjunction with some dishonest bank staffs are designing new methods on how to circumvent those measures. It will then be pointed out here that the results or implication of these is damaging. Fraud and malpractice leads to unnecessary loss of huge amount of money. This loss of money by the bank cripples banks activities and transactions.  Again, every incidence of fraud reduces public confidence on bank; hence they question the credibility of the banking industry in protecting their money and meeting up with daily transactions.

Banks fraud and malpractice delay or slow down the development of banking habits in Nigeria economy. People shy away from banks in fear of losing their money in case fraud occurs.

Banks fraud and malpractice keeps the management of banks alert and cause them to waste resources and energies on fraud prevention and detection.

1.2         OBJECTIVES OF THE STUDY

The main aim of the study is to look out for the effect of bank fraud on Nigerian Economic Development.

In view of the aforementioned problems it becomes obvious that if nothing positive is done to check the incidence of fraud, it may lead to frequent bank liquidations in the Economy.

The main objectives of this research work therefore are as followed:

1.      To Carry out the survey and investigation of the major type of bank fraud and malpractice in Nigerian Economic development in 21st century using Ecobank as a case study.

2.    To determine the causes and the basic factors encouraging bank fraud and malpractice and examine the various forms and area of occurrence.

3.    To look into the possible effects or consequence of banks frauds and

malpractice in the operation of banks in Nigerian Economic development

in 21st century.

4.    To examine the various management and government devices geared towards eliminating or controlling financial fraud.

5.   To represent recommendations or solution that many help in reducing it not

eliminated, bank fraud or malpractice in Nigerian Economic development in 21st  century.

1.3         RESEARCH QUESTIONS

The investigation concerning this study will be based on the following questions.

1.  To what extent does fraud and malpractice affect banks earning?

2.  Does fraud and malpractice lead to loss of funds in the banking industry?

3. To what extent do dishonesty bank staff, societal value and inadequate staff,

training contribute to the existence of fraud or malpractice in the banking

industry.

1.4         RESEARCH HYPOTHESIS

According to Donnel and Orwell (2001) in a book American Encyclopedia Hypothesis is defined “as a preposition assured to be true merely for the purpose of argument or a preposition or theory put forward to account for an order of a body fact”.

To guide this research work and to accomplish the above outline objectives the following hypothesis will be subject to testing.

1.  H01:  Fraud malpractices lead to /do not lead to unnecessary loss of fraud in the Banking Industry.

2.  H02: the occurrence of fraud and malpractice reduces/ do not reduce public

confidence in banking industry.

3.  H03: Dishonest bank staff societal value and inadequate staff training are/are

not major causes of fraud or malpractices.

1.5         SCOPE OF THE STUDY

The main focus of this study is on the effect of fraud and malpractice on Nigerian banks with reference to Union Bank Plc, Eco bank Plc, and Skye bank.

The staff of the banks, which includes top managers, middle managers, lower managers and other staff in Asaba, Delta state.

The study cannot be said to have covered all aspect of the topic under study and no single text, articles can pretend to have done so. Since the work is purely for academic purpose.

1.6         SIGNIFICANCE OF THE STUDY