The purpose of this study is to identify and the impact and solution of
Bank fraud an other sharp practice on the Banking Industry in Nigeria.
The research is a primary research in the sense that it is established to
investigate the causes and other sharp practices in Banking Industry in Nigeria.
The research covers the staff of Nigeria United Bank for Africa Plc. In
this research, the work of many expends in the field of the study were
reviewed. This enables the researcher to know more about the various ideals of
many theorists about the topic.
Data gathered were analyzed in different tables using percentage where
necessary an the data were interpreted as well.
The research reveals that the number of Banks involved in friends and
forgeries cases has been on decline over the past few years. Other findings
were there is decrease in amount involved have been on the increase over the
time and this across all the cadre of staff
Conclusion was drawn on the data collected and the recommends were
therefore provided as well:
TABLE OF CONTENTS
TITLE PAGE i
TABLE OF CONTENT vii-viii
1.0 INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 THE OBJECTIVE OF THE STUDY 3
1.3 PLAN OF THE STUDY 4
1.4 SCOPE OF THE STUDY 4
1.5 SIGNIFICANCE OF THE STUDY 4
1.7 FORMULATION OF HYPOTHESIS 5
1.8 DELIMITATION OF THE STUDY 5
1.9 DEFINITION OF TERMS 5
2.0 REVIEW OF THE RELATED LITERATURE 7
2.1 INTRODUCTION 7
2.2 HISTORICAL BACKGROUND OF U.B.A PLC 7
2.3 TYPES OF FRAUD IN BANKING INDUSTRY 8
2.4 SCOPE OF FRAUD IN BANKING INDUSTRY 10
2.5 CAUSES OF FRAUD IN BANKING INDUSTRY 11
2.6 THE IMPACT OF FRAUD ON BANKING INDUSTRY 13
3.0 RESEARCH METHODOLOGY 15
3.1 INTRODUCTION 15
3.2 DETERMINATION OF POPULATION 15
3.3 SAMPLE PROCEDURE 16
3.4 DATA COLLECTION TECHNIQUES 16
4.0 DATA ANALYSIS AND PRESENTATION 17
4.1 INTRODUCTION 17
4.2 INTERPRETATION OF THE DATA 17
4.3 TEST OF HYPOTHESIS 21
4.4 GENERAL COMMENTS 22
5.1 SUMMARY 23
5.2 CONCLUSION 24
5.3 RECOMMENDATION 25 REFERENCES
OF THE STUDY
The level of fraud in the day Nigeria has assumed
an epidemic dimension. It has eaten deep in to very aspect of a having to the
extent that a three-year-odd-child talks about 419.
Fraud id defined as a deliberate act
of deceiving somebody in all illegal way in order to make to obtain goods
belonging to another party. For an action to constitute Fraud there must be a
dishonest intention and the action, must be intended to benefit the preparation
to the determine of another person.
Going by this definition fraud in Nigeria economy
cannot be restricted to the bank alone. Fraud in the Banks is not know, they
are as old as the Industry itself. However, like in the greater society they
have become one of the most intractable problems of modem day banking.
Other sharp practices that is being
perpetrated in the banking industry includes, embezzlement and theft, miss use
or harm the asset of the bank, manipulation of figures, forgeries but all these can be compassed into Fraud that is the
word “Fraud” can capsulate all these acts.
Fraud can be committed by the
employers, customer and management of the bank concerned or others operating
independently or in conspiracy with others inside or outside the financial
The historical trends and analysis
of the banking industry in Nigeria
is discussed to assist in the understanding of the philosophies that will guide
prospective reader in the extent to the bank Frauds had been in place.
Modern banking in Nigeria dates
back to the early colonial period. This is as the period when the activities of
transaction of the colonial government the deadline of the bater system of
frauds and the increasing acceptance of British silver coins, all desired for
constitutions in the form of commercial banks for safety and transmission of
frauds, the importations and distribution British coin, and provision of credit
facilities to the government an the trading companies (usage 1981).
It was for this purpose in 1872 that
the Africa Banking Corporation of England was invited to open a
branch office based in Liverpool and West
But due to some difficulties, the
bank was taken over in 1894 by Elder Depicter and Company with a name as Bank
of British West African (now First Bank
of Nigeria Plc ) Registered in London, the bank started with a authorized
capital of $100,000. Due to the success of the bank of British
West Africa other organizations soon began to show interest in
banking opportunities in the Country. This led to the establishment of the
Anglo-African Bank, later known as banks of Nigeria, but which became
liquidated other were the colonial bank which changed its name of Barcley bank
and company (now the Union Bank of Nigeria Plc 1919) also British and French
bank 1948 (now the United bank for Africa Plc) and such other foreign owned
However, these banks do not serve
any useful purpose for Nigeria
rather they serve as a dear channel for the economies of their promoters who
are most importers and whose activities were based on the decision taken at
their overseas head offices.
In other word the development of
conventional banks only served as instruments of explosion and expropriation of
resources from the Nigeria economy and as such were inconsistent wish local
needs, interest and aspirations to help develop the nation economy.
These among other factors led to the
birth of many locally owned and manage indigenous banks, between 1933 to the
period of 1952, as much as twenty-five banks were established by Nigerians. Buts
it is very sad that out of these banks only four survived beyond this period,
they are National bank of Nigeria
established by Nigerians in 1933, Agbonmage bank now Wema Bank Plc established
in 1945. The present African Continental Bank Plc established in 1945 and
Merchant bank (now default) established in 1952. Thus the period 1892 to 1952
was described as the free banking era.
The period 1952 to 1991 witnessed
series bank regulations measure ranging from the Banking ordinance of 1952.
Central bank ordinance of 1958 and its subsequent amendments to the latest
Central Bank of Nigeria
decree 24 of 1991 and banks other financial decree 25 of 1991. The essence of
these legislations was to stream line and regulate the performance of the
Thus from 1976 to 1986, the number
of banks increases from twenty-one comprising of fifteen commercial and cooperative
banks and six merchant banks to fifty-one banks made up to twenty-nine
commercial banks, and twelve merchant banks. These period was characterized
with the establishment of new generation of private banks owned by Nigerian and
Foreign private investment especially the state owned banks.
Another period that worth mentioned
was the deregulation era between 1986 and 1992 which was witness by rapid
increase in the number of banks from forty-one banks in 1986 to one hundred and
twenty in 1992 which was made up to sixty-six commercial and banks, fifty-four
As earlier mentioned in the
introducing bank, Fraud had its origin from the day of the banking industry
started in the country and in as much as the federal government through central
bank attempt to solve this problem among others by promulgating different
banking legislation, titles or no success was achieved in this regard.
OF THE STUDY
To find out the causes of fraud in banking industry
To identify the impact of fraud in banking industry
To make recommendation and suggest solution as well to
solve the problem of fraud in Nigeria
Also, the objective of united bank for African a case
study of the project work are:
Prevention of banking failure
Protection of the bank system against destructive runs
in the events of bank failure.
To protect the small savers who are unlikely to have
access to sufficient information that would enable them to evaluate the
solvency of these banks where they hold their savings.
To ensure fair play among the competing banks and thus
lead to their innovations and efficiency. The U.B.A was established with the
objectives due to the effect of structured adjustment program (SAP) and the
current deregulation of banking systems this frauds to encourage some banks to
take greater risk with customer deposit and because of the federal government
directive, it direct financial supplier
of banks and such other deposit taking institution that are facing problem of
1.3 PLAN OF
This study is divided to five
chapters, chapter one is on general introduction of the topic, chapter two is frame
work o the study and literature review methodology. Where focus on sampling
techniques. Chapter three focuses on the research methodology, which deals with
sampling techniques, chapter four deals with analysis of data which focuses on
the method of collecting test of hypothesis, chapter five is on summary
conclusion and policy recommendation.
1.4 SCOPE OF THE STUDY
The study is intended to give
broader view of bank Fraud and other sharp practices like Forgeries, Thefts in
banking industry, which is the pilot of Nigeria financial system and the Nigeria economy
As a result of the inability of the
researchers to cover the entire bank in the country. The researcher has reduced
the scope o the study to data collected from U.B.A. It will however be
supplemented with a review of contribution in the daily newspaper, magazines
and various professional journals in respect of the subject provided it is on
OF THE STUDY
study will promise on those bank executives individual and other corporate who perpetrate
fraud taking into consideration the impact on the customers shareholders and Nigeria economy
at large. It will help the future researcher and the public most especially the
bank fraud and know how to get it curved.
Also, it will put conscious and
prudent executives on the alert as to identify and tract of fraud whenever they
occurred , these would be made known from the result of this project work.
OF THE STUDY
are same limitation, which handicapped the researcher to make adequate and
proper research of this study. These limitation are these inability of the
researcher to set enough facts, most the workers or the affected staff
interview could not guide adequate and reliable fact that are needed for the
Most of ten than not, when the
office who could give adequate information are contacted, they always found to
be too busy and the title time they could spare to attend to the question of the
researcher were not always enough to discuss on some other issues which could
have also help the researcher in this study.
OF THE STUDY
word banking industry is too broad for the researcher to know the impact of
fraud on it. That is why he deliberately restricts himself on an aspect of it,
which is United Bank for Africa Plc in other to have 98% accurate if not 100%.
research intended to be carried out by making use of both primary and secondary
data. Some of the primary data will be collected through secondary data.
Also, the researcher is also aiming
at collecting data from various journals, newspaper, and magazine and read
books for the collection or relevant facts for the study.
is defines as a deliberate act of deceiving somebody in all illegal way in
order to make money to obtain goods belonging to another party. For an action
to constitute fraud there must be a dishonest intention and the action must be
intended to benefit the perpetration to the determinant of another person.
i. BANK:- This is define as financial
institution where money, securities and other valuables are kept and paid,
issued borrowed, lent or exchange.
ii. DIVIDENDS:- This is the money that is
been paid to the shareholders by the company for making use of their funds.
iii. FRAUD:- Is the use of deception for
unlawful gain or unjust merit.
iv. PROFITABILITY:- Is the yielding of a
financial merit or other benefit.
v. FRAUDSTER:- A person that commit fraud.
vi. PERPETRATE:- This is to commit a crime
or something bad.
vii. SCRUTINIZE:- This means to examine with
care and in detain.