DETECTION AND PREVENTION OF FINANCIAL FRAUD IN NIGERIA BANKS
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DETECTION AND PREVENTION OF FINANCIAL FRAUD IN NIGERIA BANKS
ABSTRACT
Banks mostly deal in cash financial instruments and other documents that are negotiable and easily transferrable in nature. As a result, it is important to note that banks are vulnerable to both internal and foreign fraud. This is a common practise in areas involving cash, checks, and fund transfers.
Because of the impact on banking and the overall economy, much research and thought is being directed towards the study of the causes of fraud in banks.
According to a recent study conducted by the Financial Institute Training Centre in Lagos, the annual average amount involved in attempted fraud was thirty-six million naira, while the annual average amount lost to banks and customers was sixteen million naira.
It is not an overstatement to say that these figures have risen geometrically upward since then, when approximately 78% 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 issue confronting our country’s banking system is long lines. Customers who are paying in or withdrawing their hard-earned money are experiencing frustration, delays, and disappointment in the banking halls.
INTRODUCTION
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
The term “fraud” has no universally accepted definition. The classification of fraud in all of its forms is infinite.
This is why courts and writers on fraud avoid or try to avoid providing a definitive definition.
Despite the various meanings associated with the concept of financial fraud, the author addressed the topic with the following working definitions.
According to the Oxford and Chamber dictionaries, fraud is defined as a criminal deception, act of deceptive trick, cheating, or swindling of a person or thing that decodes.
According to the Longman Dictionary, fraud is “an act of deceitful behaviour for the purpose of gain that may be punishable by law.”
In the eyes of a civil court of justice, fraud includes any act, omission, or concealment that involves a breach of a legal or equitable duty, trust, or confidence that is justly reposed and injurious to another, or by which an under influence or advantage is gained.
Bunmi Fagbenmi define banking fraud to mean an act or cause of deception deliberately practiced to gain unlawful or unfair advantage, such deception directed to the detriment of another. He goes on to define fraud as depriving someone dishonestly of something that is rightfully his.
Having closely studied these approaches to definition of fraud especially from the banking perspective one may correctly see bank financial fraud as a deliberate act by an individual or group within or without the Nigeria banking system to cheat swindle, deceives or manipulates in order to disposes of their funds.
Therefore fraud and forgeries in banking transaction can be perpetrated through falsification of entries in account of customers with a view to take advantage of the excess processed.
Despite several definitions of frauds, the author believes that the ones so far given are rather appropriate, adequate, and inspiring for the purpose in which the research work intends to achieve. This is because. They contain the basic elements of fraud which include that:-
(a) There must be deceit or deception directed to the detriment of another or entity.
(b) A false representation has been made knowingly or without belief in its truth or recklessly, carelessly, whether it be true or false.
(c) To obtain damages for deceit, it must be proved that the defendant intended that the plaintiff should act on it a suffered damages in consequence.
The position of banking system in our economy cannot be over emphasized. They act as the “conduct pipe: through which all the financial transactions pass.
However, fraud has proved a serious bottleneck to the proper functioning of the roles of the banking system to the Nigeria economy.
People are beginning to get worried and sooner then later may loose confidence in our banking sector due to mainly the very increasing incidence of fraud in our today’s banks
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