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Fraud in Banking System in Nigeria

Talking about fraud in Nigerian Banking industry.

The problem of fraud in our banking system may have some attachment. Therefore, there must be some factors that may have lead to this fraudulent act.

The problems are stated below:

  1. Bank malpractices
  2. Failure to appoint trusted and honest official as the banks representative in the clearing house
  3. Failure to change representative on regular basis
  4. Failure to provide locked boxes or bags for carrying cheques to and form the central banks
  5. Inadequate training facilities for clearing staff both in the offices and central bank
  6. Negligence in checking clearing cheques from the banks to avoid a case of possible short change of cheque

The above statement indicate big time fraud which occurred in banks due to poor negligent handling clearing cheques, bank management and officials have been indicated and out rightly punished for failing to do their job or doing it negligently to a part that created an enabling environment for fraudulent practices in the bank.

According to Agbadua (1980) fraud is an anti economic process and must properly be dealt with. He made it clear that for nay banking institution to stand, there must be proper management and trusted worker that are psychologically fit before employment. Ade and Wole (1982) see fraud as a virus which spreads from the banking sector to other economic activities and organization even the government and that for nay economy to be balanced, an antifraud virus should be injected to the banking industry to completely eradicate fraud from the system.

In the Vanguard Newspaper (02/01/2004) it was said that fraudulent practices that led to the fall of so many bank and organizations in time past thus step have been taken by the government by introducing an agency called The Economic and Financial Crime Commission. This agency serves as a watch dog to financial institution, organization and even the government.

Authors will enter a most expanded area of procedures to detect fraud as they implement State Security Agency No 99 the new standard aims to have the auditors consideration of fraud seamlessly blended into the audit process and continually updated until the audits completion of such findings.

They usually describe the information as a means to check fraudulent activities and practices.


There has been a great deal of interest in this topic of late! There is what I have been able to glean.

The directive to increase the capital base of Nigerian bank is an attempt to make banking more stable the perception was that a number of small banks were too vulnerable to large default, and to prone or accountability and corruption. That is the more reason why most small banks merged and Nigerian ended up with some relatively number of better capitalized and accountable banks.

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User Comments
  1. taiwo

    On June 4, 2009 at 1:57 pm

    i like the way you install your website

  2. beebee

    On July 15, 2009 at 3:51 am

    well left to me ,i believe that if a good internal control system can be established with effective and efficient monitoring,the rate of fraud and errors would be minimised.though no one is an island,we should not envisage a 100%success,there are bound to be mistakes and errors,but i think an effective and efficient inernal control system established by the management of a bank or an organisation would help to drastically reduce the rate of frauds and errors in the nigerian banking industry

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