FRAUD PREVENTION DETECTION AND CONTROL IN NIGERIA BANKING INDUSTRY
ABSTRACT
This work is all about fraud prevention, detection and control in the banking sector of Nigeria. This study has Habib Nigeria bank Limited, Enugu as a case study.
From the study, such factors like poor staffing, poor remuneration, weak internal control among other factors contributed immensely to the incidence of fraud in banks. The study revealed that the most effective way of preventing fraud in banks is through an effective in-built control mechanism. This internal control mechanism is designed in such a way to designate responsibilities so that a staff’s activities are checked by another which is in turn checked by a higher officer. This calls for a strong and independent inspection and audit department in every bank comprising of staff with impeccable integrity.
This study applied necessary data collection techniques such as questionnaires.
CHAPTER ONE
INTRODUDCTION
1.1 BACKGROUND OF THE STUDY
Fraud is a `cankerworm’ that has eaten deep into the nation’s fabrics. It is visible in all the sectors of the economy. In the financial sector, fraud is an `offshoot’ of financial crimes which covers offences, which are securities, related and involves the movement, transfer or use of monetary instruments in circumstances, which render such acts unlawful. The above definition can be extended to include any dishonest, unethical or unprofessional conduct which results in financial loss to someone or institution for the benefit of another. Financial fraud include but are not limited to the following, chequekiting, loan fraud, advance fee fraud, securities fraud, account opening fraud, insiderdetling clearing fraud, computer-fraud, telex fraud and money laundering.
Fraud as stated earlier is not peculiar to the banking industry but cuts across other sectors of the economy. Frauds in banks are not new, infact, it is as old as the industry itself. But in recent times, the practice has assumed an alarming proportion. Sometimes, the act is carried out by outsiders while in most cases there is a collaborated effort between outsiders and staff to perpetrate this financial crime.
Against this background, government in its effort to combat fraud and other financial crimes has set up various monitoring and control commissions such as the independent corrupt practices and other related offences commission (ICPC), which is the apex body, saddled with the responsibility of fighting corruption and other related offences. The ICPC was inaugurated on the 20th of September 2002. The act establishment this commission in section 3 provides for the independence of the commission and gives the chairman authority to rescue order for the control and general administration of the commission and financial crimes commission (EFCC) which was established in 2002. Another is the National Drug Law Enforcement Agency (NDLEA).
HISTORY ON MY CASE STUDY
HABIB NIGERIA BANK LIMITED
Habib Nigeria bank Ltd was incorporated as a private limited liability company in November 1982. It was granted banking license on 7th March 1983 and commenced operation on 16th May of same year.
The objectives of the bank have been to introduce and maintain a banking style with a difference in Nigeria style with a difference in Nigeria and develop a sound bank with branch network in all the states of the federation and the capital territory, Abuja. It also has it objective to provide financial and technical assistance to the public and private sector organizations within the framework of government of Nigeria’s plan and policies. It also mobilizes deposits by encouraging savings through the introduction of effective banking services and effective advertising programme. The main thrust of the bank’s philosophy is the provision of quality service with emphasis not only on the enhancement of social and moral standards but also on the need to be responsive to the requirement and aspirations of the communities in which they serve. The bank has its of banking as the values of trust, integrity and the provision of financial security. This research work will look at the bank’s operational system with the view of determining the frequency of fraud occurrence, fraud detection, prevention and control measures in the bank.
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