Minimization Of Bank Fraud In Nigeria Commercial Banks

Project and Seminar Material for Accountancy / Accounting

Minimization Of Bank Fraud In Nigeria Commercial Banks

Chapter One


1.1 Background Of The Study

Since the inception and recognition of bank in Nigeria. it has been in a head way of existence and survival. This is because since the emergence of this area of economic and business knowledge, fraud and all forms of dishonesty and misappropriation of money entrusted to one had obviously to Nigeria banks.

This defect has been lingering in the minds of honest bank employee and the student majoring into the banking profession too give potential thought as to the near future perfection of the banking and finance as a discipline fraudulent actives in the Nigerian banks have grown so great in strength, rigor and vigor that most of the banks are exposed to great risk of losses inspire of all modern sophistionted security advices employed in the dally operation and function by Nigeria banks.

Banking industry is the bed rock of any developing and developed economy the world over. It is therefore very important to find out any problem that rises to to disrupt those industries. Every transactions involved in international trade is done through the banks and this is what depicts the direction of any economy all over the world. Industrial development and establishment project financing etc are all done through banks therefore the eradication fraud in banks is the concern of every worthy patriot of this great nation, fraud is an international misrepresentation consentient for the purpose of inducing a mother in reliance upon it to pant with some valuable things, money properties belonging to him or generally to surrender a legal right. Although the existence of fraud in our banks is not our uncommon or unexpected phenomenon. It is worrying because “of all the various problems conformity the Nigeria banking industry today that of fraud is easily the most intractable.

The banking industry worries more about fraud because of the rather obvious damaging consequences of the acts on the heaths and for the existence of the institution.

According to the Oxford Advanced Learner Dictionary of current English the word “fraud” means criminal deception. This is a straightforward definition. The great master dictionary Hamlin Encyclopedia world dictionary defines “fraud” as:” deceit” tricky sharp practice or breach of confidence by which some one who sought to gain unfair or dishonest advantage any deception artifice and trick.

Also, the term fraud can be defined in so many ways “fraud” in the contemplation of a civil court of justice may be said to include all acts, omissions and concealments which involve a breach of legal or equitable dusty trust of confidence justify reposed and are injurious to another or by which an under or unconscientiously advantages is taken of another

Finally, Wale Adewuni describe fraud as a conscious premeditated action of a person or group of persons with the inteation of altering the truth and or fact for selfish personal monetary gain. It invoues the use of deceit and trick and sometimes highly intelligent cunning and know-how

These can emerge as a result of non- strict adherence to documented and established rules and regulation in individual banks and such regulations in individual banks and this has gone a long way in enhancing fraud in our banks and is very bad thing so to say.

Also, these skilled professionals in the management level of these banks. Lack of inbuilt accountability devices including having regular auditing of accounts of customers these banks do not organize fraud seeming so as to discuses the problems fraud cause them and fine out these people who actually make fraud possible in their banks and the solutions to these problems lack of proper recruitment and training policy on the part of the banks


The proposed objective of this project is to determine ways of minimizing frauds in Nigeria commercial bank because fraud has brought about banks failure in Nigerian banking industry. It is time we study fraud and how it can be reduced in Nigeria bank this act tends to make people loose confidence in financial institution in Nigeria. At this point it seems necessary to find solution to this problem that is reduced frauds in Nigeria banks, fraud is an enemy of baking business in Nigeria, fraud is obtainable more especially in banking sectors them any other place. It is the biggest single cause of bank failure therefore it is necessary to find solution to the problem so that we can evaluate the performance of bank in Nigeria when fraud is being reduced in Nigerian banking industry

1.3 Purpose/Objective Of The Study

  1. To identify the effect of bank fraud on the activities of commercial banks
  2. To identify the loopholes in accounting and audit function that create avenue for the perpetration of fraud in the banks and ascertain the relevance of the emphasis placed on vouchers and withdrawal from customer account
  3. To determine the extent of involvement of bank staff in encouraging fraud in commercial banks.
  4. To survey the nature and form of fraud in our banks

1.4 Significance Of The Study

This project is drawn for all those who may be interested in carrying out further study on frauds in the Nigeria banking institution.

This study will go a long ways to certify the following:

(i) Staff:

Whether there is the need to improve the condition of the worker and whether this well make them not to think of fraud and reject any attempt by outsiders to influence them into frauding their banks

(ii) Customers:

Almost every bank fraud has either direct on an indirect effect on a customers are made to bear the bank when there is a bank fraud

Commercial Bank And Management:

Running cost increases in fragment occurrence of fraud and, time energies that would be spent improving customer’s services would be expended on preventing fraud.

1.6 Definition Of Terms Used


This means criminal deception or any act of this kind, getting money by deceit is term fraud one who engages in a fraudulent activity is called a fraud stain


Is a corporation or person or persons who accepts money on current accounts pays cheques on such accounts on demand and collects cheques for customers.


Reduction bringing down some thing down to its lowest level.


Means deceiving, also as it used in this research project it means causing somebody to accept as true something that is false.

International Trade:

Trade between two different countries e.g. Nigeria vs. Britain

Minimization Of Bank Fraud In Nigeria Commercial Banks

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