NATURE AND EFFECTS OF BANKING INDUSTRY FRAUDS IN NIGERIA, 1990-2008
ABSTRACT
This study on “The Nature of Banking Fraud in Nigeria” (1990 to 2008) covered the period Nigeria Deposit Insurance Corporation (NDIC) took over the management and control of 24 distressed banks, liquidation of 26 Banks in 1998 and the re-capitalization of banks in 2005 by the Central Bank of Nigeria (CBN). These were designed to analyse the financial history of fraud in Nigeria. The technique of ordinary least square (OLS) was used to analyse the data on the relationship between Returns on fraud by insured banks in Nigeria between 1990 to 2008 and Deposit liabilities of insured banks within the period (1990-2008). The model was measured and analysed to determine the shift of the function overtime. The Regression result of the model showed that Fraud Intercept was positive during the period of the study (1990- 2008), which revealed that in absence of the level of Deposit liabilities of insured banks, fraud must still persist in the financial system. The study, therefore, recommended among other things that, the prevention, control and detection of frauds should be a collaborative effort of banks, their customers, the public and the government including relevant agencies. Moreover, fraud in the financial system, should as much as possible, be minimized as it kills the institutions and destroys the economy of a nation.