CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF STUDY

Fraudulent act in the banking industry” is of a special concern to the monetary control and supervisory authority who are charged with the safety of individual banks and the soundness of the banking industry.

Fraudulent act” is common in Nigeria banking industry, but clients as well as employees, temporary staff engage in fraud and forgeries in banks.

Frequent occurrence of fraud ultimately distracts the attention of the management and lead to increase in running cost.

Time and energy that would have been spent improving customer service would be expended on preventing fraud. Increasing cases of fraud and  forgeries in our banks lately if not shoped would pose certain threats to the stability and survival of individual banks and the performance of the industry as a whole. Reported cases of fraud in merchant banks dropped significantly from 16 in 1997 to 9 during the year 1998 similarly, there was a reduction in the total amount involved, from 187-59 million in 1997 to N67.35 million in 1998.

Fraud in whatever loss is limitless in classification. In banking industry, there could be presentation of forged cheques granting of unauthorized loans unauthorized over draft, position of fictitious credits, suppression of cheques, fraudulent transfer and withdrawal and so on Dr John Orjih in his text, defined fraud as the deliberate effort aimed at obtaining unlawful advantage at the detriment of another person who is the rightful owner of the fund.