ABSTRACT

Fraud is an epidemic dimension that has eaten deep into the banking sector as well as the entire economy. Itsdevastating effect manifests itself in the deteriorating balance sheet of banks as well as in economic backwardness. As a result, measures to eradicate fraud in banking sector become a central focus of the government and the monetary authorities. It was against this backdrop that this study was aimed at providing empirical evidence on the effect of fraud on performance of banks. Data for the analyses were obtained from primary data through questionnaires and secondary data from Nigeria Deposit Insurance Corporation (NDIC) Annual Report. Four hypotheses were formulated to access the impact of looting of fund, social and environmental factors, motivation and government effort on effect of fraud on banks performance in Nigeria. These were tested with simple percentages and chi-square (x2) statistical technique at 5% significance level. Results showed that lack of adequate motivation is not a major cause of fraud in banks, looting of fund by bank managers and directors constitutes the major form of fraud in Nigeria, government effort and its agencies have negatively impacted on combating fraud in Nigeria and environmental or social factors have negative impact on bank fraud. On the basis of findings, it is recommended that government should make their impact to be felt in combating fraud by establishing more agencies for combating frauds. Those managers and director involved in looting of fund should be persecuted to serve as a deterrent to subsequently once. In addition, bank staff should be properly screened to test their morality and integrity before recruitment. Adequate internal control system should also be establish to have check and balances among bank staff. It is envisaged that if all these are put in place, fraud will be reduced to its barest minimum thereby restoring confidence to bank customers.

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List of Appendixes

Appendix 1: Letter to respondents

Appendix 2: Questionnaire to some staff

Appendix 3: Chi square table

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LIST OF TABLES

Table 2.2.4.1: Total amount involved in fraud and forgeries

Table 2.2.4.2: Ten banks with highest fraud cases

Table 2.2.4.3: Categories of banks staff involved in fraud and forgeries

Table 4.1: Analyses of questionnaires issued to respondents

Table 4.3.1: Test of hypothesis 1 with related question

Table 4.3.2: Test of hypothesis 2 with related question

Table 4.3.3: Test of hypothesis 3 with related question

Table 4.3.4: Test of hypothesis 4 with related question

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TABLE OF CONTENTS

Cover page   ……………………………………………………………………....i

Title                 page   ………………………………………………………………………..ii

Approval page ………………………………………………………………….iii

Certification …………………………………………………………………….iv

Dedication ……………………………………………………………………… v

Acknowledgements ...…………………………………………………………..vi

Abstract ………………………………………………………………………..vii

List              of   appendixes   …………………………………………………………iiiv

List of tables ………………………………………………………………….   ix

Table of contents ……………………………………………………………… x

CHAPTER ONE: INTRODUCTION

1.1  :  Background of the study …………………………………………...1

1.2  :  Statement of the problem …………………………………………..3

1.3  : Objectives of the study ………………………………………………...5

1.4  : Research Questions ……...…………………………………………...5

1.5  : Research   hypotheses……………………………..……………….5

1.6  : Scope of the study …………………………………………………....6

1.7  : Significance of the study …..…………………………………………..6

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1.8 : Limitation of the study ………………………………………………... 7

1.9: Definition   of   .terms……………………………….8

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1: Empirical study ………………………………………………….9

2.2: Theoretical framework ……………………………..…………… 12

2.2.1: Causes of bank fraud …………………….…………………… 12

2.2.2:  Categories of bank fraud …………………………………….15

2.2.3: Types of fraud ……………..………………………………….18

2.2.4: Fraud and its effect on Nigerian banks...……………………. 20

2.2.5: Government attempt to prevent bank fraud...………………...25

2.26: Ways   to   prevent   fraud   ……………………………………….....2

2.2.7: Fraud resolution ……………..……………………………….28

CHAPTER THREE: RESEARCH METHODOLOGY

3.1: Research design ……………………………………………….… 29

3.2: Nature   and   sources………………………………….ofdata29……

3.3: Population of the study ………………………………………….29

3.4: Sample size determination ….……………………………………. 30

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3.5: Technique of analyses   ………..….…………………….....31