FACTORS AFFECTING BANK FRAUDS: THE CASE OF NIGERIA MSc THESIS

Abstract

The banks according to the laws that establish them are primary set to play fundamental roles in aiding economic activities in the countries. As the being part of economic activities banking sector found itself more susceptible to fraud. Fraud has become a problem in banking system too. Fraud in the banking industry is a global problem and it is increasing in in Nigeria banking system. In Nigeria, The Central Bank of Nigeria (CBN) was established in 1958 and commenced operations in 1959. The supervisory institutions about fraud are The Nigeria Deposit Insurance Corporation (NDIC), and The Chartered Institute of Bankers of Nigeria (CIBN). This paper investigates the macroeconomic factors affecting in Nigerian banking sector by using 1995-2013 annual data. To investigate this relationship two groups of data are used which can be defined fraud variables and macroeconomic variables of Nigeria. The used variables about the fraud are total amount involved in fraud, total expected loss in fraud, percentage of loss on total amount involved in fraud and total number of frauds; the used macroeconomic variables are population, exchange rate, interest rate, gross national income, gross domestic product. In the empirical application, descriptive statistics, graph and correlation analysis are used. The results show that the banking reform has no effect on fraud and crisis has significant effect on fraud in Nigeria.