ABSTRACT
Chapter
one deals with the introduction of the topic which explain the background of
the study
Chapter
two deals with the review of related literature of the topic.
Chapter
three discuss the research methodology of the study.
Chapter
four discuss the data presentation and analysis of the topic.
Chapter
five which is the last chapter deals with summary, findings, suggestion,
recommendation and conclusion.
References
is also included to aid the study.
TABLE OF CONTENTS
Cover
Page
Certification
i
Dedication
ii
Acknowledgment iii
Abstract
iv
Table
of content v
Chapter One
1.0 Introduction 1
1.1 Background of Study 1
1.2 Statement of Problem 2
1.3 Objective and Relevance of Study 3
1.4 The Scope and Limitation of the Study 4
1.5 Research Question and Hypothesis 5
1.6 Methodology 7
1.7 Sources of Data 8
1.8 Variable in the Study 10
1.9 Data Analysis 11
Chapter Two:
Review of Related Literature
2.0 Introduction 13
2.1 Definition of Fraud 13
2.2 Types of Clearing Fraud 14
2.3 Causes of Bank Fraud 16
2.4 Institutional Factors 17
2.5 Conversion of Clearing Instrument 17
2.6 Returning an Instrument with Deceitful
Reason 18
2.7 Forging of Clearing Instrument 18
2.8 Environmental/Social Frauds 19
2.9 Effect of Bank Frauds 22
Chapter Three
3.0 Research Methodology 36
3.1 Research Methods Used 36
3.2 Research Instruments Specification 37
3.3 Sampling Procedure and Sampling 40
3.4 Method of Data Analysis 44
3.5 Research Questions 44
Chapter Four
4.0 Data Presentation and Analysis 47
4.1 Introduction 47
4.2 Personal Data 47
4.3 Test of Hypothesis 55
Chapter Five
5.0 Summary/Findings Suggestions,
Recommendations
and Conclusion 57
5.1 Summary/Findings 57
5.2 Suggestions 58
5.3 Recommendations 59
5.4 Conclusion 61
References 63
Questionnaire 65
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF STUDY
Banks are like any other business organization which
are established for the primary purpose of making profit. Frauds has become a
bone of contention to the development of banks and other financial institutions
particularly this past decade. However, due to frauds or bad management,
granting of loans without collateral and other related factors increased the
distress syndrome and total collapse of some banks and the resultant effect on
the action economy was quite devastating. Consequently, this is an attempt to
examine the impact of fraud on organization performance in the Nigeria banking
industry. The causes, the nature and suggestions as to how the menace of fraud
can be reduced or minimized to the barest minimum or possible totally
eliminated shall be examined. This will help to forestall the total collapse of
the banking system as such would have serious consequence on the economy.
John C.E. (1996) noted that fraud has always been in
existence; it effects on banks has become a source or worry to the government,
the customers, the management of the various banks as well as the international
community, the pre-civil war banking industry has fe operational problem than
the post-civil war banking system banks workers exhibited a his/her degree of
job discipline and their customers showed a better degree of normal discipline
than what is a seen in banking sector of the Nigerian economic today. Bank
fraud was not common within this period.
The monumental growth witnessed between 1987 and
1996 brought in the sharp practices, which latter metamorphosed into
malpractices that had to the collapse of many banks institutions.
Ajibola (1999) further said/stated that the banking
industry constitute one of the pillars which the economy of any nation can be created.
Hence, the government, bank management and customers
should be everything possible to reduce fraud or possibly eradicate it.
Bank fraud and for series have been a case for
concern in the industry and its growth may lead to a fall in the Nigeria
economy.
1.2 STATEMENT OF PROBLEM
The problems addressed in this study is the overall
of fraud and its negative impact on organisational performance in the banking
industry in Nigeria. It is clear that fraud has become a serious problem for
many years. This has a negative impact on top management staff as more as their
time spent on attempt to find solution to the persistent fraudulent practices
among all cadres at bank staff.
This menace of fraud in banks ahs often had to loss
of huge amount of with the active collaboration of bank officials, some banks
officials collaborate with customers and other outsiders to perpetuate fraud in
banks, the regularity and magnitude of the occurrence of fraud in banks has led
to loss of pubic confidence in banking system and also loss of reputation of
the bank(s) involved in a number of cases the relevant regulatory authorities
had to close some affected banks where fraud of considerate magnitude has led
the banks into difficulties.
Apart from closure of banks by the relevant
regulatory authorities; Nigeria Deposit Insurance Corporation (NDIC) and Central
Bank of Nigeria (CBN), many customers or potential customers are not willing to
deposit their money with any bank. This has adversely affected the growth of
savings culture, which has not assured well for the economy in general and
banks in particular. This is because banks depend on deposits fund to lend to their
potential investors and since this funds are not sufficient, they are unable to
meet a fundamental rite of banks, that is, challenging idle funds to where they
are needed.
The economy has also suffered as a result of the
inability of banks to lend to investors and this economy has not been able to
grow as expected, leading to increased unemployment, robbery and other crimes,
social unrest etc mainly as a result of unemployment.
These various consequences of fraud in bank and the
economic in general has brought to the fore the need for fraud detection and
control in Nigeria, needless, to say that the relevant authorities banks
management regulation authorities and the government are in their various and
joint capacity doing all that is conceivable than to arrest frauds in banks and
also in the society in general. It is therefore hoped that an insight into ways
frauds are perpetrated and the resultant effect on the economy in general will
enable the appropriate authorities take not only necessary but appropriate setups
in checking the menace of fraud on the banks, customers and the economy in
general.
1.3 OBJECTIVE AND RELEVANCE OF STUDY
The occurrence of fraud in the banking industry has
been on the increase and this has impacted negatively on the banking industry
and the economy in general.
This study therefore intends to examine the impact
of fraud and misappropriation on organizational performance in the Nigeria
banking industry. This study also intends to find out in general terms, the
causes of frauds in banks. This study also intends to find out in general
terms, the causes of frauds in banks. This study also intends to recommend for
reaching solution to control of fraud and reduce it impact and also to minimize
the incidence of frauds in banks so as to prevent failings of banks due to
fraud cause neither by customers, outsiders not by the management of such
banks. This study relevant lie in the fact that there is a public outery against
the frequently reported cases of fraud in banks from the media based on
information obtained from the central bank of Nigeria (CBN) Nigeria Deposit
Insurance Co-operation (NDIC) and reports from various banks. A studying of
fraud impacts on organisational performance because of very great significance
to every Nigerian, customers banks, regulatory authorities, government etc.
This is because any study that can help in reducing
the incidence of fraud is not totally eliminated and will bring great relief to
all participants in the Nigeria economy.
1.4 THE SCOPE AND LIMITATION OF THE STUDY
This study is a case study of Access Bank Plc with
head office and several branches in Lagos. This study will involve twenty-five
staff of Access Bank from the head office and branches in Lagos. These
respondents will be divided into these groups i.e. ten respondents in each
group the groups will be made up of management senior, junior staff
respectively. The choice of Access bank informed by the fact that the banks has
her head office in Lagos and Lagos is the largest commercial city in Nigeria
with over ninety percent of the study carried out in Lagos respectively of
incidence and impact of fraud in the banking industry.
The major limitation of the study is the relatively
small sample, the sample, the sample is not large enough and therefore might
not be representative of the total population of bank in Lagos or Nigeria in
general. Due to the small sample, which might not be representative of the
total population, there is difficulty in arriving at results, which may be
accurate. The smallness of the sample is as a result of the difficulties is not
only having stuffs of the bank to participate but also due to the cost involved
and the high rate or either not required questionnaire or not fully completed.
Again, a major limitation is the made of settings
respondents from each of the groups of the bank staff, this is as a result of
the apathy by members of the groups to give information concerning their
organisation.
Inspite of these limitations, the method used to
divided into management, senior staff may give a fair reflection of the group.
1.5 RESEARCH QUESTION AND HYPOTHESIS
Research
Question
1.
Can poor staff
remuneration package cause fraud in Nigeria banks?
2.
Can incessant
fraud lead to collapse of banks
3.
Can incessant
fraud lead to damage of bank reputation.
NULL HYPOTHESIS
1.
Poor staff
remuneration package are not the causes of frauds in Nigeria banks.
2.
Incessant fraud
can lead to collapse of banks
3.
Incessant fraud
cannot lead to collapse of banks and cannot damage banks reputation
Alternative
Hypothesis
1.
Poor staff remuneration
ractice are the causes of frauds in Nigeria banks.
2.
Incenssant fraud
can lead to collapse of banks.
3.
Incessant fraud
cannot lead to damage of banks reputation in Nigeria economy.
1.6 METHODOLOGY
This is a case study however, the survey method was
adopted in choosing the respondents from each of the three categories of groups
in Access bank, the respondents were made up of management, senior staff and
junior staff of the bank.
Two main causes of fraud were used for the study
both poor remuneration package and collapse of banks and damage to a bank’s
reputation.
A total ten respondents in each staff cadre of equity
bank (Access bank) were chosen through simple random sampling to guide the
stratification of respondents into employment cadre dependence was placed on:
a. Information
provided by respondents
b. the
nature of respondent job and
c. Type
of car and residential area.
Sample size: in chosen the sample size, one factor
we contend with in the study is the size of your sample which is economic
sample: because it include enough participants to ensure a valid design because
choosing small sample may witness sampling error to be 300 of completely
eliminated, therefore will determine to choose the junior staff because it has
more population in the groups and result obtain in this populace will be used
to represent other groups and for such large sample the formular which was
drawn by Yard (Yard 1973) was used:
n = N
1
+ N (e)2
Where n
= sample size
N
= population size
e
= margin of samplings error
When the population size is not know to us then the
formula: n
n = p (1 –
p)
e2
was used to determined the exact population of
staffs and management in the bank.
Data collections begin the next step taken by
obtaining information from the respondent (junior staff) such information like:
1.
Type of car each
one them is using
2.
There
residential area of each respondents
3.
To known whether
salary, obtained by each staff is sufficient to them.
4.
To known whether
working hour is comfortable to each staff. ]
And also the data analysis techniques were use like:
1.
Time Sampling: This
samplings techniques is appropriate when behaviour occurs continuously
interaction between the junior staff for example (30 seconds).
2.
Individual Sampling: This technique is appropriate when you want to
preserve the organization of a staff behavior over time rather than simply
notions how often particular behaviors occur.
3.
Event Sampling: This
samplings technique is appropriate when you can clearly define one behavior as
more important than others and focus on the one behaviour.
1.7 SOURCES OF DATA
The primary source of data will be through the
administration of questionnaire on different employees of (Access bank)
questionnaires will be designed and administered on the selected employees of the
banks chosen for his study.
Secondary sources of data include journals,
textbooks, Nigeria deposit insurance cooperation (NDIC) and Central Bank of
Nigeria (CBN) publications, government gazettes etc.
1.8 VARIABLES IN THE STUDY
The independent variables in the study are
a.
Staff
remuneration
b.
Collapse of
banks
c.
Damage of the
bank reputation
d.
Internal control
The dependent variables are
a.
Education
b.
Staff cadre
c.
Income class
d.
Number of years
in the bank (experience)
1.9 DATA ANALYSIS
In analysis data collected fro the purpose of the
study a simple percentage will be computed. Chi-square will be used to test the
hypothesis, the formular for chi-square is
X2 = (0 – E)2
E – 1
Where
X2 = chi-square
E = expected chi-square
0 = observed frequency
Level of significance according to statistical model
0.5 = 5.99. At the end of test, a categorical statement shall be made, whether
to accept the null or alternative hypothesis.
Data analysis involves transforming of collected
data through research instrument to a form that allow data collected from the
junior staff to be accurately and efficiently analyse through such steps:
1.
Codins (i.e.
assigning letter and numerical valve to various answers to prepare them for
tabulation.
2.
Re-cording:
using an array of number, calculation and frequency distribution.
3.
Data description
and summation: this can be achieved through percentages, measures of central
tendency, measure of dispersion of variation (bar, histogram)
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