Fraud in Nigerian Banks and Its Impact on Banks and the Nigerian Economy

8/11/2019 Fraud in Nigerian Banks and Its Impact on Banks and the Nigerian Economy

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O01R0I12 O+ +R3UD

+raud is a complex universal phenomenon. It is rampant in oth developed and developing countries

and varies across time and places in its magnitude$ its sources$ the %ay it manifests itself and in its

effects on administrative performance and development. 4olitical$ economic$ social$ cultural and

attitudinal factors comine in contriuting to its incidence.

"." D1+INITION O+ +R3UD

Olufidipe ,"##!- defined fraud as (Deceit or trickery delierately practiced in other to gain some

advantage dishonesty.55

+raud means an act of dishonesty$ deceit and imposture 3lashi$ ,"##!-

3ccording to 6irkpatrick ,"#78-$ (a person %ho pretends to e something that he is not is a fraud$ a

snare$ a deceptive$ trick$ cheat and a s%indler.

9y extension fraud %ill include eme::lement$ theft or any attempt to steal or unla%ful otain$ misuse

or harm the assets of ank ,9ank 3dministration Institute$ "#7#-.

".; DI'1N


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1. C3U


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+rauds in the anks are not ne% they are as old as the industry itself. 9ank fraud can e defined as a

conscious or delierate effort aimed at otaining unla%ful financial advantage at the detriment of

another person %ho is the rightful o%ner of the fund. OrBih$ ,"##7-.

".8 C3U


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perpetration of frauds in financial institutions.

D. +ear of Negative 4ulicity/ many financial institutions fail to report fraud cases to the authorities.

They elieve that doing so %ill give unnecessary negative pulicity to their institutions. This is not

only a chance for fraudsters to thrive it is great challenge to a researcher as regards to data collection.

1. Unemployment and igh level of 4overty in Nigeria/ Nigeria is one of the riches economies in the


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fraud prevention and detection series are discussed elo%/

3. 3dvance fee fraud ,(!"#55-. This involves an gent approaching a ank$ a company or an individual

%ith an offer to access large funds at elo% market interest rates often for long term. The purported

source of such funds is not specifically identified as the only %ay to have access to it is through the

agent %ho must receive a fee or commission (in advance).

9. Che&ue 6iting/ kiting is defined y the U< comptroller of the currency5s policy. *uidelines for

National 9ank Directors as (method %herey a depositor utili:es the time re&uired for che&ue to clear

to otain an unauthori:ed loan %ithout interest charge.)

C. 3ccount@Opening +raud/ this usually starts %hen a person not kno%n to the ank asks to open a

transaction account %ith false identification ut unkno%n to the ank.


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*. Computer +raud/ computer frauds can take the form of corrupting the program,s- and even

reaking into the system via a remote sensor y a computer programmer or specialist .Diskettes can

also e tampered %ith to gain access to unauthori:ed areas or even give credit to an account for %hich

funds %here not originally intended.

. ?oans +rauds/ ?oan fraud occurs %hen credit is extended to non@orro%ing customers or to

orro%ing customer %ho had exceeded his credit ceiling. The fraudulent aspect of this class is that

there is intent to conceal it from the head office ,inspectorate- staff on routine check to deceive them

%ith plausile ut falsified statements$ documents etc. That is to say a credit facility for a customer

(3) yet to e dra%n is diverted for the use of customer (9). Other types of ank frauds include

counterfeited securities$ clearing fraud$ letters of credit fraud$ forging of anks Ruer stamps$

sustitution of names in credit vouchers$ over stating interest charges$ manipulation of dormant

accounts and unauthori:ed printing of ank stationeries and che&ue fraud etc.

".G 1HT1NT O+ +R3UD IN 93N6F."#! ;7.>"7 ;8.!#7 "."7

"##; >8".#"> 8#.7; F!.7 7.>"

"##> ">GF.> !".#; ;!"." 8.>G

Total ;77.!;! >.87 >>".>7 "!.7F


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T39?1 ;

Numer of 9ank

". . Clerks and Cashiers ;>F "8F "#;

!. Typist$ Technicians P !

8. 'essenger $ Drivers$ Cleaners and "# !

Total 8"! !>F 8"G

Q


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C. *?O93? 41RC14TION. Nigeria has ecome synonymous %ith fraud as some of its citi:ens use

the oom in internet fraud and corruption has ecome an unfortunate staple in NigeriaLs international

reputation. The country regularly features at the top of international surveys measuring the part played

y graft in different economies.


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N:otta$ NO. !ppG@".

OrBih. $ ,"##7- 1lements of 9anking$ 1nugu Nigeria Communications 4ulishers.

Fraud in Nigerian Banks and Its Impact on Banks and the Nigerian Economy

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