TABLE OF CONTENTS
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
1.2 BACKGROUND OF THE CASE STUDY
(ECOBANK)
1.3
STATEMENT OF THE PROBLEM
1.4 OBJECTIVE OF THE STUDY
1.5 RESEARCH QUESTIONS
1.6
STATEMENT OF RESEARCH HYPOTHESES
1.7
SIGNIFICANCE OF THE STUDY
1.8
SCOPE OR DELIMITATION OF THE STUDY
1.9
LIMITATION OF STUDY
1.10
DEFINITION OF TERMS
CHAPTER TWO
2.0 REVIEW OF RELATED LITERATURE
2.1 THE HISTORY OF BANKS IN THE
ECONOMY
2.2 FORMS OF BANK FRAUD IN NIGERIA
2.3 THE CAUSES OF BANK FAILURES
2.4
THE MEANING OF BANK
2.5
THE ROLE OF BANKS IN THE ECONOMY
2.6
TYPES OF FRAUDS IN THE BANKS
2.7 FACTORS
INDORSING THE PREDOMINANCE OF FRAUDS IN BANK
2.8 POOR LEADERSHIP REGULATORY
AUTORITIES
2.9
FRAUD DETECTION TECHNIQUES
2.10
IMPLICATION OF FRAUD ON THE BANK
2.11 PROCEDURES FOR CONTROLLING
FRAUD IN BANKS
2.12 MANAGEMENT
2.13 LIQUIDITY
2.14 CAPITAL ADEQUACY
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 RESEARCH DESIGN
3.2 THE POPULATION OF THE STUDY
3.3 SAMPLING PROCEDURES
3.4 SOURCES OF DATA COLLECTION
3.5 METHOD OF DATA COLLECTION
3.6 DATA ANALYSIS TECHNIQUES
CHAPTER FOUR
4.1
PRESENTATION, ANALYSIS AND
INTERPRETATION OF DATA
4.2
MEASUREMENT OF DATA
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND
RECOMMENDATION
5.1 SUMMARY
5.2 CONCLUSION
5.3 RECOMMENDATION
BIBLIOGRAPHY
REFERENCE
APPENDIX I
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Commercial Banks are legal entity
with perpetual succession formed as a corporate body under law, by an
association of person, Basil (2001: 1) according to companies and Allied
matters Act 1990 section 29, companies are classified into three types
1. A private company limited by shares
shall end with the word “limited”. (Ltd).
2. Public company limited by shares ends
with the words “public limited” (plc)
3. Company limited by guarantees shall
end with the words “ limited by Guarantee)” in brackets (ltd Gtc)
It is based on these that we shall
call to mind on the issues concerning financial organizations. A financial
institution is a business organization and establishment, which deals with
money and financial assets such as shares, bills of exchange, treasury bills
etc. Augustine (2003:38).
Financial institution are regarded as
banks, which is comprised of central banks, commercial banks (known as joint
stock banks) and others. Financial institutions do not focus on banks as long
but those institutions which pool or mobilize savings and excess liquidity from
individuals, firms, corporate bodies etc.
It is obvious for one to know that a
country or an economy cannot stand without a proper banking system. Banks
originated from man’s question for store-keeping or safe keeping of wealth.
1.2 BACKGROUND OF THE CASE STUDY
(ECOBANK)
Company’s profile of Ecobank
Ecobank Nigeria Plc, commonly
referred to as Ecobank Nigeria,
is a commercial bank in Nigeria.
It is one of the commercial banks licensed by the central Bank of Nigeria the
national banking regulator. The bank was established in 1985 and began
operations in 1986. It operates as a universal bank providing wholesale,
retail, corporate, investment and transaction banking services to its customers
in the Nigerian market. The bank divides its operations into three major
divisions: (a) Retail Banking (b) wholesale banking and (c) Treasury and
financial institutions. The bank also offers capital markets and investment
banking services during the forth quarter of 2011. Ecobank Nigeria acquired 100%of the
shareholding in Ecobank, creating the expanded Ecobank Nigeria Plc.
1.4
STATEMENT
OF THE PROBLEM
The statement of the problem serves
as the corner stone upon which the gross research plan is based, Baridam (1993:
22). It is quite convincing that a “sound banking system is a healthy economy”.
As we have previously discussed, there was an up ward trend in the failure of
banks in the recent decades. A tendency, which though is not peculiar to
Nigerians can impede the economy and affect the public adversely. This takes
into consideration, the problems that are responsible for the banks which are
as follows:
1. Fraud
2. Unqualified management staffing
3. Excessive overdraft facilities to
customers
4. Lack of motivation to workers (incentives).
5. Excess liquidity i.e total
operational failures
While the failures ahs effect on the
economy at large, these are listed as follows;
i.
Divestment: After a banks failure, instability
comes which throws investors off balance and for this reason, the investors
will retreat or withhold their investments
ii.
Demand deposit: Commercial banks collect this from
customers with this agreement to pay interest to the individuals and there by
making or creating their own interest or profit by lending to borrowers fails
to redeem the loans as when even though the banks had collected some
collaterals from them (borrowers).
1.4 OBJECTIVE OF THE STUDY
The main purpose or objective of this
research is
1. to conduct investigation on the
causes of bank failures
2. To know the effect of bank failures
on companies i.e (investors) in the economy
3. To explore and reveal the various
failures of banks
4. To proffer solution and
recommendations on the possible ways to solve the problems of bank failures in
all sectors of the Nigeria
economy
1.5 RESEARCH QUESTIONS
It is clear that a bank cannot fail
without any sigh that means, that these are some other things that must have
contributed in the failure of such organizations which we expect from the
respondents to highlights us on them in this project: they are
i.
What
factors are responsible for bank failure in Nigeria?
ii.
Does
banks failure have any effect on the Nigeria economy?
iii.
What
corrective measure could be taken to the effect of bank failures on Nigerian
economy?
iv.
What
are the likely effects of bank failure to the other sectors of the economy?
v.
What
are the reactions of the individuals and stake holder/investors towards bank
failure in Nigeria?
vi.
How
has bank distress affected the banking habit of the people in Nigeria?
1.11
STATEMENT
OF RESEARCH HYPOTHESES
A hypothesis is a proposition that is
stated in testable form and prediction of particular relationship between two
or more variables.
Hypothesis
Ho: There
is no relationship between bank fraud and economic development
Hi There
is a strong relationship between bank fraud and economic development
H0: there is no strong relationship between poor bank financial
management and distress in the banking sector.
Hi: Poor bank management leads to frauds and distress in the banking
sector
1.12
SIGNIFICANCE
OF THE STUDY
This study will render a vital
services to all the sectors in this economy. The banking sector is widely
regarded as the financing or the financial power house to all other sectors in
the economy internally and externally.
This study is obviously significant
to the
i.
The productive sector: In every economy, the productive
sector is the procreation of wealth or goods and services sector. The
productive sector has so many dealing with the bank that makes it working to be
hungry for the banking information.
ii.
The government: it is the government that controls
the overall activities of all the sectors in an economy. Government needs sound
information from the financial sector to forcast the future and the velocity of
money in the circulation with the use of monetary policy i.e. fiscal and
contractual policies. It uses the fiscal policy to monitor the spending habit
of a given society, while contractual policy is used to reduce the aggregate
spending with the use of cash reserve ration, sanction, directive from the CBN
and the interest rate determination.
iii.
Academics: it is also useful to students of
financial management especially, the accounting student. It serves as a guide
to whatever financial management difficulties they may meet along the line.
iv.
Financial analysis: this study itself is a financial
analyzed work. It has much to give to the finance decision-making of any
financial field. It is a formidable guide to every one who has anything to do
with finance and financial planning in order to eschew future losses.
1.13
SCOPE
OR DELIMITATION OF THE STUDY
This study focuses on commercial
banks because of its role in Nigerian banking sector, although other banking
sector will be investigated.
1.14
LIMITATION OF STUDY
The foreseen limitation to this study
would be:
Time:
Considering the academic work load on campus, time is foreseen to be a limiting
factor.
Finance: money
in the economy is not quite enough and any project demands for therefore,
finance is one of the limiting factors to this study.
Data collection:
This could be problematic for some of the reasons concerning the negative
altitudes of business organizations to the questionnaires. They may be afraid
of disclosing their personal data to their competing rivals. The bank staff
too, for some undisclosed reasons could not give us sufficient and useful
information.
1.15
DEFINITION OF TERMS
Bankers drafts:
This is a bill of exchange drawn by a bank on another branch office of the same
bank.
Bankers habit:
This means the extent or degree of willingness of the people in a given economy
to make use of the facilities and services of bank sector.
Collateral:
Assets pledged for securing a loan
Liquidity: It
can be defined as the ability of a bank to meet its day to day cash obligation
on the depositors
Moral Suasion:
it involves the use of persuasion and appeal by the CBN to commercial banks to
cope with the CBN guidelines.
Monetary policy:
it is policy of government which influences the timing availability and cost of
money and credit to the economy in other words; it is a deliberate measures
design in the monetary authorities of a country to regulate, influence and
control the volume of money circulation.
Treasury certificate: This is a money market instrument. It is used for raising money from
the government for a duration of 1-2 years issued at a discount rate.
Bank overdraft:
This a bank facility granted by a bank to a customer on agreed conditions to
overdraw his account up to a certain limit on interest rate.
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