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PROJECT TOPIC: EFFECTS OF FRAUD IN THE BANKING INDUSTRY

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1.0        INTRODUCTION

Banks all over the world have through their unique position in an economy, contributed immensely to the economic growth and development of a nation. Therefore any problem that tends to hinder their operation such as ‘fraudulent practices’ is often viewed with seriousness. For long, Nigeria’s financial system has suffered from fraudulent practices perpetrated by bank employees, people outside the banks as well as cooperative bodies. This situation became worrisome between the periods of 1992 – 1995 with unprecedented upsurge in bank fraud, particularly with the New Generation Banks (NGBs). These malpractices have led to unhealthiness and technical insolvency of Banks and total collapse.

Bank frauds all over the world were perpetrated essentially for selfish economic benefits. Thus, according to Ajamole (1990) in (Emergence of Computerized Banking) he defined fraud “as an act or course of deception, deliberately practiced to gain unlawful or unfair advantage to the detriment of another”. Any act of unfair dealing whether against the bank by its customers or against the bank by its officers or against the customers by the bank, (including its officers) is regarded as fraud. Various fraud practices have been reported and most of these cases have been tried in various courts and bank malpractices tribunal. Since the introduction of the Failed Bank Tribunals, some measures of sanity now reign in the banks.


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