FRAUD AND IT’S ROLE ON BANK FAILURE

ABSTRACT

          This project/term paper is designed to critically analyse the fraud on bank failure and its role in Nigeria financial Institutions with reference to the banking system.

          Fraud in both private and public sector of Nigeria economy is an age long phenomenon  that has for a long time being threatening the growth and development of the Nigeria Nation State. It has defiled the very professional expertise know-how due to its continuous increase.

          The effect of fraud on the Nigeria financial institutions mainly regarded as the life-wire of the nations economy is to say the least devastating. Found outs across the length and breath or the Nigerian financial institutions and has resulted in resulting many well established firms to mere existing level, while so many others have been completely liquidated. It is this ugly development in the “Power house” of the financial sector of our economy that altercated my interest hence my choice of the topic: Fraud and its role on bank failure; with particular reference to the banking system. 

          This work will dig deep into the

1.                 Types of fraud.

2.                 Caused of fraud

3.                 Extent of involvement of insiders and outsiders in the preparation of fraud.

In this project/ term paper chapter explain the term fraud, it tries to explain the fact that fraud is and to continues to trouble the financial sector of the economy unless great efforts are put together to fight it. Chapter one starting with the introduction which is the scope of the study. Chapter two is the literature review which embraces the subheading; Types of fraud, foreign exchanges malpractices, tilex fraud, fraud against the company, Advance free fraud  (419), Bank  fraud, and the effect of fraud on banks.   Chapter three is the solution to the menace of fraud. Further, the summary of the whole finding recommendation by research and possible conclusion on the topic.

          The bibliography is also there.

TABLE OF CONTENTS

Title page                                                                                                   

Approval page                                                                                          

Dedication                                                                                                 

Acknowledgement                                                                                     

Abstract                                                                                                     

Table of content                                                                                         

CHAPTER ONE

1.0     Introduction                                                                                               

CHAPTER TWO

2.1            Types of fraud                                                                                 

2.2            Foreign exchanges malpractices                                                                

2.3            Telex fraud                                                                                       

2.4            Fraud against the company                                                              

2.5            Advanced free fraud (149)                                                               

2.6            Bank fraud                                                                                       

2.7            The effect of fraud on banks.                                                           

CHAPTER THREE

3.1     Summary                                                                                         

3.2     Recommendation                                                                             

3.3     Conclusion                                                                                       

3.4     Bibliography                                                                                    

CHAPTER ONE

1.0     INTRODUCTION

          The period between 1947 and 1952 witnessed a rapid growth of indigenous banks in Nigeria. The increase in the number of indigenous banks was correspondingly  followed by a high rate of collages of such banks. By 1954 about 21 out of 25 indigenous  bank operating then in Nigeria had folded. The experience of banks failures was a sad affair for both officials, depositors and regulator.

          However, since the establishment of CBN IN 1959 the government had ensured through direct support mechanism that the banking public was no longer exposed to the hazards of bank failures. The government active involvement in banking and other economic scenes, were both for socio-economic and political consideration. The issue of efficiency in both the allocation and utilization of resources in these sectors where government actively participate, was therefore, relegated behind other considerations that were mainly socio political.

          However, charge in the country’s  fortunes coupled with increased competitive demand for resources in these sectors called for a review of government participation in the economic scene, in particular the liability and efficiency of its investments hence the deregulation of the entire economy, as well as the  banking industry.

          The deregulation of banking industry marked a turning point in the causes of bank failures. The proliferation of banks, relative growth of the industry, provision of improved services offered and higher wages to bank workers, among other fulled  the issue of fraud in financial institutions.