DETECTION AND CONTROL OF FINANCIAL FRAUDS IN NIGERIA BANKING SYSTEM; PROBLEMS AND SOLUTION (A CASE STUDY OF U.B.A)

ABSTRACT: Banks deal essentially in cash financial instrument and other documents which are generally of a negotiable and easily transferable in nature. Hence it is very pertinent to say that the exposure of banks to both internal and external fraud is very great. This practice is very common to area involving cash, cheque and fraud transfer operation. Much research and thought are increasingly being directed towards the study of the causes of fraud in Banks because of its affects on Banking and the entire economy. Recent study carried out by financial institutions training centre, Lagos, showed that causes of fraud reported annually between 1989 and 1998 was about 500 and the annual average money involved in attempted fraud was thirty-six money naira while the annual average lost to banks and customers was sixteen million naira. It may not be said to be an over statement that these figure may have risen geometrically upwards afterwards when about seventy eight percent of our banking operations are going to rural areas where poor institutional and infrastructural factors militate against efficient and effective checks on the branches in these rural areas. Another problem facing our nation’s banking system is that of long cheques, frustrations, delays and disappointments being experienced in the banking halls by customers while either paying in or withdrawing their hard earned money. These associated problems and deficiencies have in recent years resulted to disencouraging growth of banking habit among the public. This society has been turned into a mere “cash society”. My personal experience as an accounting personal in one of the private companies and various articles I read on the problems of our banking system has aroused my deep interest in this project topic. It is therefore my pleasure to carry out this e on ‘detection and control of financial fraud in Nigeria banking system” using U.B.A plc as a case study. Chapter one of this research work deals with introduction and over view on financial fraud. The second chapter reviews the previous write-ups on the subject matter. The third chapter assesses the work procedures on banks and focuses the loopholes inherent in there that aid fraudsters carryout the nefarious activities. Chapter four of this work did on analysis of financial frauds by examine the methods used by fraudster’s in defrauding the banking system. It establishes that falsification of accounts and forged cheques and signatures ranked highest as means of perpetrating frauds. An examination of categories of persons involved in the preparation of fraud reveals that bank staff are in the majority. This chapter also focuses on the final incidence consequence of bank fraud.

Chapter five discusses the general prevention techniques (solution) available to bank management in checking financial fraud, while the last chapter evaluates and concludes the with personal economic on the issue of financial frauds in our banking industry.

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION

1. Background of the study                                                        1
2. Statement of the problem                                           4
3. Objective or purpose of the study                              5
4. Scope or delimitation of the study                             6
5. Research questions                                                      7
6. Hypothesis                                                                              7
7. Significance                                                                8

CHAPTER TWO: REVIEW OF LITERATURE 

1. Who are the bank fraudsters                                       13
2. Fraud and fraudulent practice in banking services     16
3. The legal framework                                                   20
4.  What is fraud                                                                         25
5. Causes of fraud in U.B.A bank                                              29
6. The effects of fraud in U.B.A. Bank                          31

CHAPTER THREE: METHODOLOGY

1. Research design                                                                      33
2. Area of the study                                                                    44
3. Sample and sample procedure                                                45

CHAPTER FOUR

1. Data presentation and result                                       50

4.1       Summary of results/findings                                       50

CHAPTER FIVE

1. Discussion implication, recommendation                   74

5.1       Discussion of result                                                     75

5.2       Conclusion                                                                              80

5.4       Recommendations                                                                  84

5.5       Suggestions for further research                                 87

5.6       Limitation of the study                                                           88

References                                                                              89

Appendices                                                                             91

CHAPTER ONE

INTRODUCTION