Bank Fraud And It Effect On Bank Performance In Nigeria

1.3 OBJECTIVES OF THE STUDY 

The general objective of the study is to highlight cause and various forms of bank frauds, its effect and ways of preventing them. The specific objectives which this study is designed to achieve include.

i.  To identify the causes of fraud in banks

ii. To examine the various types of fraud perpetrated in banking.

iii. To identify the various ways employed in defrauding banks.

iv. To recommend measures aimed at preventing, controlling and detecting the incidence of banks fraud.

1.4 RESEARCH QUESTIONS

The following research question guided this study:

1. In what ways does lack of effective internal control system lead to banking fraud?

2. In what ways does lack of enough motivation or incentive causes banking fraud?

3. In what ways do societal values contribute to bank fraud?

4. In what ways do bank frauds contribute to the dwindling economy fortune of our country?

1.5 RESEARCH HYPOTHESES

For the purpose of this research work, the following assumptions are made;

Ho: There is no relationship between effective internal control and bank fraud.

Hi: There is relationship between effective internal control and bank fraud.

Ho: There is no relationship between motivation or incentive and bank fraud.

HI: There is relationship between motivation or incentive and bank fraud.

Ho: Societal values do not of have any effect on bank fraud.

Hi: societal values do have effect on bank fraud 

1.5 SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study the findings will be very useful; 

 To Banks and Financial Institutions as it will be beneficial to the authorities concern with banking operation, managements, staff customers and prospective investors in the industry so as to identify the various means (theft, embezzlement, forgeries etc.) employed in defrauding banks and to identify the cause of frauds in banks in Nigeria. To government as they will find this work relevant to future policy and decision making with particular to restructuring its agencies for better performance in detaching frauds in Nigeria banks. To the general Public the study will be so useful because the banking industry touches the life of everyone in an economy. Banks all over the world have contributed immensely to the economic growth and development of nations. As such, problems such as fraud which can hinder the smooth operation of the banking industry should be viewed with all seriousness in other not to intercept or destroy the rate of development. Finally, to academia it will also be beneficial to people who will intend to carry out further research in this area, to find this study relevant in their research.

1.6 SCOPE AND LIMITATION OF THE STUDY

This study centers on fraud in the Nigerian banking industry with a keen interest on four (4) insured banks. The four insured banks covered includes United Bank for Africa Plc, Diamond Bank Plc, First Bank of Nigeria Plc, Zenith Bank Plc, all in Nigeria. In the cause of the study, the researcher encounters some limitations which limited the scope of the study; 

Staff Reluctance: In most cases the staff of the banks used in the study often feels reluctant over providing required information required by the researcher. 

Researcher’s Commitment: The researcher, being of full time student spent most of her time on other academic activities such as test, class work, assignment, examination etc which takes average focus from this study.

Inadequate Materials: Scarcity of material is also another hindrance. The researcher finds it difficult to long hands in several required material which could contribute immensely to the success of this research work. 

1.7 DEFINITION OF TERMS 

Fraud: In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud itself can be a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation), a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities) or it may cause no loss of money, property or legal right but still be an element of another civil or criminal wrong. 

Banking sector: The banking sector is the section of the economy devoted to the holding of financial assets for others, investing those financial assets as leverage to create more wealth, and the regulation of those activities by government agencies. 

Financial Crime: Financial crimes are crimes against property, involving the unlawful conversion of the ownership of property (belonging to one person) to one's own personal use and benefit. Financial crimes may involve fraud (cheque fraud, credit card fraud, mortgage fraud, medical fraud, corporate fraud, securities fraud (including insider trading), bank fraud, insurance fraud, market manipulation, payment (point of sale) fraud, health care fraud); theft; scams or confidence tricks; tax evasion; bribery; embezzlement; identity theft; money laundering; and forgery and counterfeiting, including the production of Counterfeit money and consumer goods. 

Nigeria:  is a federal republic in West Africa, bordering Benin in the west, Chad and Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea in the Atlantic Ocean. It comprises 36 states and the Federal Capital Territory, where the capital, Abuja is located. Nigeria is officially a democratic secular country.

Economy: The economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources'. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. Monetary transactions only account for a small part of the economic domain. 

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.