Examination of fraud in the Nigerian banking sector: Causes, Effect and its prevention

(A case study of some selected commercial banks in Nigeria)

BYMuhammed Umar Dikko

Department of Banking and FinanceWaziriUmaru Federal Polytechnic

Birnin Kebbi, Kebbi State.Nigeria.

mahdikko@gmail.com Phone No +2348036458813IntroductionThere is a genuine fear that the increasing wave of bank fraud is causing a lot of havoc in our financial systems. This is because the bank fraud has eaten deep into every aspect of the banking system to the extent that many banks have lost the confidence of their customers.The banking sector plays a very significant role in the development of anyeconomy (Adeyemo, 2012). Banks in most economies are the principaldepositories of the public's monetary savings, the nerve centre of thepayment system, the vessel endowed with the ability of money creation andallocation of financial resources and conduit through which monetary andcredit policies are implemented (Idolor, 2010 and Akindele, 2011).Fraud in banks are not new, they are as old as the industry itself. However, like inthe greater societies, it has become one of the most hard to manage problems ofMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionmodern day banking. While the concern of the banking community is growing dayby day and management vigilance is improving with the help of Computerizationamongst others. It is pertinent that millions of naira is still being lost to fraud ondaily basis. While some of the frauds are the handwork of outsiders, others areperpetrated by the staff and sometimes management of the banks concerned.The most significant percentage of fraud is done by fraudsters in collaborationwith bank staff. As a result of this, very serious economic crimes, some staff in theindustry have either been dismissed, or have their appointment terminated orprematurely retired. This means that some experienced staff in the sector are lostdue to their involvement in fraud. The involvement of some bank executives inlarge scale fraud is now a source of serious concern in the industry. The success ofmonetary policy, to a large extent, depends on the health of the banking

institutions through which the policies are implemented (Adeyemo, 2012;Godwin, 2009; Oye, 2003). Whatever problems which militate against the properfunctioning of the banking sector will invariably have multiplier effects on theother sectors of the economy. This is one of the reasons why it is essentialto quickly diagnose any factor which may hamper the smooth functioning ofthe banking sector and urgently address such issues. Fraud has been identified asa major threat to the growth and development of the banking sector, not only inNigeria but globally. This study examines fraud in the Nigerian banking sectorand how it can be prevented.2. Statement of the ProblemFraud is a major challenge to the entire business world, no company is immune toit and it is in all facets of life (Olorunsegun, 2010). The banking public expectsaccountability, fairness, transparency and effective inter-mediation from banks.Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionThe banks are expected to ensure that they carry out their responsibilities withsincerity of purpose which is devoid of fraudulent practices. This is germane if thebanking sector is to gain public trust and goodwill.The monumental growth andtransformation witnessed by the Nigerian banking industry brought with it somesharp practices which metamorphosed into wide spread fraud which is contrary tothe desire of any economy. Considering the Nigerian experience in recent past,where fraud, corruption failures and distress have become the order of the day Inorder to prevent a collapse of the payment mechanism, encourage monetarystability, ensure an efficient and competitive financial system, protect customers’interest and ensure a safe and sound banking industry, government has takensteps to regulate the banking industry and various banks have sent their staff on avariety of training to enable them provide better services. But despite all these,operators and staff of the banking industry however, engage in activities that arecontrary to the objectives and ethics of banking. Though there were known casesof fraud in the sector, one major question still remain unanswered, which is:what is the nature, immediate and remote causes of fraud, and how can itbe prevented? It is this problem which necessitates this research study.Objective of the StudyThe main objective of this study is to ascertain the nature and causes of fraud inthe Nigerian Banking sector and to proffer possible solutions to the problem.Specifically, this study seeks to

1. It aims to identify the procedural lapses and various other causesresponsible for bank frauds2. Ascertain the factors which encourage staff involvement in fraudulentactivities.Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its prevention3. To analyze the extent and effects of fraud on the banking industry andeconomy in general4. Identify some measures used by regulatory authority which can help indetecting, preventing and controlling fraud in banksHYPOTHESISHypothesis refers to an experimental statement, tentative in nature, showing therelationship between two or more variables. It is open to test and can be acceptedor rejected depending on whether it agrees or disagrees with the statistical test.The study will test the validity of the following hypothesis1 H0 : Procedural Lapses and other factors do not accord for bank frauds.2 H0 : There will be no significant relationship between fraud and bank Staff3 H0 : There is no relationship between fraud and banking performance4 Ho: The regulatory measures are not effective in detecting, preventingand controlling fraud in banksSignificance of the studyThe study will be useful to the general public because the banking industrytouches the life of everyone in an economy. Banks all over the world havecontributed immensely to the economic growth and development of nations. Assuch, problems such as fraud which can hinder the smooth operations of thebanking industry should be viewed with all seriousness in other not to intercept ordestroy the rate of development.The efficiency of the banking industry is a necessity for the proper working of anation. Thus, this study would be of great use to authorities concern with bankingoperations, managements, staff customers and prospective investors in theindustryMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionSCOPE OF THE STUDYThe study centers on fraud in the Nigerian banking industry with a keen interest

On some selected commercial banks. It recorded cases of fraud in the Nigerianbanking industry, what constitute fraud, causes of fraud, most common types offraud, their effects on the banking industry, fraud detecting methods andrecommendations for controlling and prevention of frauds in the Nigeria bankingindustry.LITERATURE REVIEWFraud has been classified in various ways and using various parameters. Howeverfor the purpose of this paper, we shall employ the perpetrators criteria as follows:Management Fraud, Insiders, these perpetrators are purely the employees of thebanks, Outsiders, these include customers and/or non- customers of the banks,Outsiders/Insiders. This is a collaboration of the bank staff and outsiders asdescribed in Insiders or Employees FraudsInsider Fraud: This is also known as non-management fraud and they are usuallyperpetrated by the employees of the Banks or organizations. It is the applicationof fraudulent means to obtain money or other property from the organization(Robertson, 1996). According to Olatunji (2009), insiders frauds in the bankinvolves falsification of some kind, lying, exceeding authority, violation ofemployer’s policies, embezzlement of company’s funds, usually in form of cash orother assets. Boniface (1991) identifies some of the typical manifestations ofemployee’s frauds in the banks to include:Cash thefts from the tills by banks’ staff, Forgeries of customer’s signature withthe intention of illegally withdrawing money from the account with the bank, Useof forged cheques to withdraw money from the customer’s accounts, OpeningMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionand operating of fictitious account to which illegal transfers could be made andfalse balance credited, Lending to fictitious borrowers effected through fictitiousaccount opened at a branch, Claiming of overtime for hours not worked,Suppression of cash / cheques, Fund Diversion: In this case, bank staff (forpersonal use), sometimes diverts customers’ deposits and loan repayment.Another case of this is the tapping of funds from interest in suspense accounts inthe bank, Computer Fraud: This type of fraud takes the form of alteration of theprogrammes or application packages and even bursting into the system viaremote sensors. Diskettes and flash drives can also be tinkered with to gain accessto unauthorized domains or even give credit to accounts for which the funds werenot ab initio intended. This kind of fraud can remain undetected for a longtime.OUTSIDERS FRAUDS

These are frauds perpetrated by customers and non-customers of banks. Theprimary function of a commercial bank is to connect customers with capital deficitto customers with capital surplus in the financial market. In implementing thisfunction, banks and bank workers come in contact with both customers andnoncustomers, and this contact engenders the risk of fraud. According toOnkagba, (1993), as sited in Idowu, (2009), the most common methods ofoutsiders’ fraud are:ADVANCE FEE FRAUDThis may involve an agent approaching a bank, a company or individual withanother to access large funds at below market interest rates often for long term.This purported source of funds is not specifically identified as the only way to haveaccess to it is through the agent who must receive a commission “in advance”. Assoon as the agent collects the fee, he disappears and the facility never comesMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionthrough. Any bank desperate for fund especially distressed banks and banksneeding large funds to bid for foreign exchange can easily fall victim of this type offraud. When the deal fails and the fees paid in advance are lost, these victims arenot likely to report the losses to the police or to the authorities.CHEQUE KITTINGKiting is defined by the US Comptroller of the Currency’s Policy Guidelines forNational Bank Directors as:“a method where a depositor utilizes the time required for cheques to clear toobtain an unauthorized loan without any interest charge” Cheque kiting involvesthe unauthorized use by depositors of undeserved credits in their accounts. Thisoccurs when a depositor utilizes the time required for a cheque to clear to obtainan authorized loan without interest charge. The goal of the cheque kitter may beto use these uncollected bank funds, interest fees for a short time to overcome atemporary cash shortage or to withdraw the funds permanently for personal use.ACCOUNT OPENING FRAUDThis involves the deposit and subsequent cashing of fraudulent cheques. It usuallystarts with a person asking to open a transaction account such as current orsavings account with false identification but unknown to the bank. The personopens the account with a small initial deposit of cash or cheque. Generally, within

a few days, the person will deposit a number of dud cheques and obtain cash inreturn, either by cashing the fraudulent items outright or by withdrawing cash assoon as funds are available with the connivance of bank staff.MONEY TRANSFER FRAUDMoney transfer services are means of moving financial resources to or from abank to beneficiary account at any bank point worldwide in accordance with theMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventioninstructions from the banks’ customers. Some common means of money transferare mail, telephone, over-the-counter, electronic process and telex. Fraudulentmoney transfer may result from a request created solely for the purpose ofcommitting a fraud or altered by changing the beneficiary’s name or accountnumber or changing the amount of the transfer.CLEARING FRAUDMost clearing frauds hinge on suppression of payment instrument so that at theexpiration of the clearing period applicable to the instrument the collecting bankwill give value as though the paying bank had confirmed the instrument good forpayment. Clearing cheques can also be substituted to enable the fraudster divertthe fund to a wrong beneficiary. Mis-routing of clearing cheques can also assistfraudsters to complete a clearing fraud. In other words, a local clearing item canbe routed to an up-country branch. In the process of re-routing the instrument tothe proper branch, the delay entailed will give the collecting bank the impressionthat the paying bank had paid the instrument.COMPUTER FRAUDThe rapid development in information technology and globalization has hadserious impact on banking practice in the country. Those factors are expected tocontinue to drive the way banking businesses are conducted in the country asmore and more banks move to automate their back office and clients’ services.Also with the advent of the Internet, E-commerce, E-banking, etc, it is no longernews that somebody could stay in the comfort of his home and move millionsaround the globe. Some banks in Nigerian offer on-line services for some of theirclients. While this is convenient, it equally carries with it the risk of computerfraud as there seemed to be no longer discernable boundary nor perimeter alongMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionwhich to erect the defenses to keep corporate data within and inaccessible tocomputer hackers outside. While computer frauds more especially those

perpetrated by hackers, are yet to be reported to the Regulatory Authorities inNigeria, reports from on site examination of banks have continued to drawattention to the poor attitude of some banks to the issue of computer security.OUTSIDERS/INSIDERS FRAUDThis involves a collaboration of bank staff and outsiders for the purpose ofdefrauding the bank. For bank’s outsider fraud to succeed, more often than not,there must be an insider who is providing information and other logistic supportto the outsiders.CAUSES OF FRAUDS IN NIGERIAN BANKSIn the words of Ojo (2008:92), the causes of fraud and forgeries in bankingtransactions can be classified under two generic factors namely:The institutional or endogenous factor and Environmental or exogenous (social)factors.The institutional factors or causes are those that are traceable to the in-houseenvironment of the banks. Though the list of institutional factors is inexhaustible,the notable ones are:Weak accounting and internal control system, Inadequate supervision ofsubordinates, Disregards for “know your customers (KYC)” rule, Poor informationtechnology and data base management, Poor salaries and conditions of services,General frustrations occasioned by management unfulfilled promises, Failure toengage in regular call-over, Employees’ refusal to abide by laid-down procedureswithout any penalty or sanction, Banks reluctance to report fraud due to theperceived negative publicity or image. This is capable of engendering more fraud,Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionBanking Experience of staff: frauds in banks occur with higher rate of recurrenceamong staff with little experience and knowledge in financial praxis. The moreexperience and knowledgeable a staff is, the less probability that frauds wouldpass such staff undetected unless with active support of that staff. InadequateInfrastructure: Poor communication systems and power failure, result to a buildupof unbalanced postings, overcrowded office space etc, these encourage thecommittal of fraud in banks, inadequate training and re-training, Poor Book-Keeping, Genetic traits: - These are trans-generational (or inherited) attributepossessed by an individual that propels him to engage in frauds. For instance, akleptomaniac who pathologically steals for the fun of it would naturally not do

well as professional banker.BAD MANAGEMENTExperience has shown that banks with bad management record have higherincidence of fraud than banks with efficient management. Poor management interms of inadequate control, incompetence, bad planning, in adequatesupervision, poor judgment, ineptitude, lack of co-ordination, poor delegation ofauthority and corruption create an environment for frauds to flourish.RECRUITMENT SYSTEM: Bad recruitment policy, where relevant technicalknowledge, competence, character and other sterling qualities are thrown to thedogs, facilitates fraud in banks. The recruitment system in bank nowadays is basedon connections or “whom you know” syndrome. Where cognate experience,relevant technical knowledge, competence character and other good qualities aresacrificed at the altar of non-performance which facilitates fraud and corruption.STAFF NEGLIGENCE: In some circumstances, staff negligence could give rise tothe perpetration of fraudulent activities in banks. Negligence can be a product ofMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionseveral factors, such as bad supervision, lack of technical knowledge, apathy,pressure and lack of cognate experience.INTERNAL CONTROL: Lack of, or poor application of internal controlmechanism create an environment for fraudulent inclined staff and otheroutsiders to commit fraud.POOR SECURITY ARRANGEMENTS FOR DOCUMENTS:If free access is often gainedto documents like cheques books, drafts, specimen signature cards etc… which arethe tools used for frauds, it becomes very easy to defraud in banks.BANKING EXPERIENCE OF STAFF:All things being equal, the more experienced astaff is, the less the chance of fraud passing through him undetected, unless he isa part of it, or involved in the act. i.e. fraud occurs with higher frequency amongstaff with little experience and banking knowledge. But where professionallyqualified bankers are involved, the amount of fraud is reduced.

VOLUME OF WORK AND NUMBER OF STAFF:In a situation where by an averagebank worker handles a large volume of work that is beyond his ability, it mayresult in efficiency which may result in or encourage fraud. Most banks or theirbranches are under-staffed. This makes a single staff to handle much work if notall aspect of a very sensitive transaction which in normal circumstance is supposeto be handled by more than one staff. Over loading individuals with work leads tolack of checks and balances as well as perfunctory performance of jobs. When thestaff is over stretched, he will be unable to work at an appropriate level ofefficiency and may be prey to perpetrators of fraud and less vigilant toirregularities committed to defraud banks.THE ENVIRONMENTAL OR SOCIAL FACTORSAccording to Idowu (2009:632), environmental factors are those that can be traceMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionto the immediate and remote environment of the bank. These factors or causesaccording to Ogbunka (2002:188), are manifest in the following manner:The penchant to get rich quick, Slow and tortuous legal process, Poverty and thewidening gap between the rich and the poor, Job insecurity, Peer group pressure,Societal expectations, increased financial burden on individuals, Stiff competitionin the banking industry which saw many banks engaging in fraud so as to meet upin terms of liquidity and profitability.Adewumi (1998) argued that the high propensity to perpetrate bank fraud inNigeria is a direct product of our materialistic society. The get-rich-quick syndromepropels bankers towards bank fraud. Other environmental factors include:GENERAL LUST FOR AFFLUENCE: It has been noted that our society has becomeone where most people want to be rich over night by hook or by crook. Suchpeople dismiss morality as an unnecessary prerequisite for virtuous life. To them,the end justifies the means.OUR VALUE SYSTEM: The manner in which some people “worship” “wealthy”people ion our society, without caring about their source of wealth, and the risingsocietal expectation from bankers and the subsequent desire to live up to suchexpectation are contributory catalyst for bank fraud.ECONOMIC DOWN-TURN: For the past few years, Nigerian Economy has

witnessed an unprecedented evaluation of its currency and excessive bitinginflation. Consequently, both the political and economic situations declined frombad to worse with graduates roaming the streets in search of employment.Workers’ take-home salary does not take them home safely, while purchasingpower tends to decline drastically with concomitant reduction in the standard ofliving. This situation pushes some bank staff to commit fraud.Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionLACK OF EFFECTIVE PUNISHMENT: Delays in prosecution of fraud cases and lackof heavy punishments are factors that contribute to un abating perpetration ofbank fraud in Nigeria financial system. For instance, it is much easier to sendsomeone who steals a goat to prison than to prosecute a bank manager who“steals” N100 million.FEAR OF NEGATIVE PUBLICITY: The failure of banks to report fraud cases to therelevant authorities, because of fear of negative publicity, encourages fraudstersto defraud banks. They belief that the affected bank will not prosecute themENCOURAGEMENT OF BANK STAFF: The encouragement of bank staff byoutsiders and syndicates is a growing source of fraud in banks. These outsidershave two irresistible inducements to offer to the insiders. Firstly, they are told thatthe whole exercise carries no risk as far as they are concerned.Secondly, big monetary reward awaits them. The idea of making money byinvesting nothing and risking nothing are irresistible to the potential fraudster.TECHNIQUES OF DETECTING FRAUD IN BANKSTo counter this malady, bank management has to to institute functional system ofinternal control so as to detect causes of fraud and where they are likely to occur.However, according to Idah (2004) such detecting techniques include thefollowing:Establishing a system of checking cashier both on regular or un programmedbasis. Experience has shown that surprise visits in the books and the files ofaccountants and cashier reveals a lot.Bank management should establish a system of call-over reconciliation and thebalancing of accounts at the branch and inter-branch head office level. This willexpose any corrupt practice that may result in fraud and be quickly prevented.

Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionManagement should ensure that proper books of accounts are kept at all time byvarious sections and that customers receive their statement of accounts regularlyand on timely basis.Bank inspectors should establish a system of stock taking of security items andcash kin vaults. There should be regular and unscheduled check of security itemsand cash by managers in charge of treasury operations. This will expose any theftof cash, cheques etc. That is used in perpetrating fraud.Regular reconciliation of inter-bank accounts inter-banking clearance Accounts,effective and prompt follow up and clearance of outstanding items.Prompt and regular inspection of bank branches by inspections. These will enablethe bank to promptly discover any corrupt practice or fraud and prevent thembefore they are accomplished by their perpetrators.MEASURES FOR CURBING FRAUD IN BANKSSo far, the prevention and control of bank fraud have been a collaborative effortinvolving the banks, government and its agencies and the general public. Thebank’s ability to prevent and control fraud depends on the quality of its staff andthe effectiveness of internal control place. Wolff (1986) defines internal controlsystem as: The whole system of controls, financial and otherwise, established bythe management in order to carry on the business of the enterprise in order andefficient manner, ensure adherence to management policies, safeguard assets andsecure as far as possible the completeness and accuracy of the record. Theresponsibility of establishing and maintaining an adequate system of internalcontrol lies with the banks management, through issuing code of conduct toemployees and monitoring new legal requirements and operating procedures toensure that the organizational methods meets modern requirements. The humanMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionresources and the internal control systems, on which the efficiency and security ofthe bank rest, are closely monitored by the management.According to Hafsat S.M (2006) as sited on Shongotola (1994): The usualmeasures, which ensure timely prevention and control of bank frauds, arecategorized by Shongotola (1994) as: Personnel controls, Administrative controls,Accounting controls, financial controls, Inventory controls and Process controls.

Personnel control include proper recruitment and proper disengagementprocedures, posting and placement, job rotations enforced holidays and annualvacations and training programmes .Administrative controls include segregation ofduties; security devises e.g. Regis cope cameras passwords, franking machines,cctv, and etc. Accounting controls include data validation prompt posting oftransactions, balancing of accounts, reconciliation and proper identification ofauthorization and approaches.Financial controls include cash limits signing power and specialized stationer.Inventory controls include physical checks and counts and bin cards, stock receiptnotes, stock issued voucher etc.Process control includes input/output and program controls. Although all thecontrols are used in every aspect of bank operations as fraud antidotes orprevention techniques, special attention is given to the accounting controls astheir proper application is very vital to the system’s efficiency and effectivenessagainst bank frauds. Banks financial operations are reviewed at regular intervalsby means of interim account and report. Shongotola (1994) summarizes howfrauds are prevented and controlled in the following words:…. If every voucher is properly checked and due approval confirmed, if properpostings are made and posted entries promptly called over, if balancing andMuhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionreconciliation exercise are regularly performed, if figures are measured againstprojections\ standards and variances are analyzed, if statistics are monitored andappropriate returns are sent and received on time, the possibility of fraudoccurrences or non – detection would be quite remote.Bank managers pay particular attention to means of payment and customersaccounts. There are rules for cash movement such as physical checks andbalancing of cash, agreeing the vault book With Billion officers cash control book,paying surprise visits to cashiers and daily exchanges of tills and till books. Specialattention is also paid to the non- cash payment instruments such as cheques,bankers payment etc. when it comes to clearing, care is taken to prevent

substitution, loss or destruction of clearing documents. Apart from some cases ofdefalcation and direct theft, most bank frauds are committed on or throughaccounts. That is why customers accounts are monitored from the time of openingthem to the time they will be closed down.Government has promulgated appropriate statutes and established relevantinstitutions that will ensure that incidence of frauds in banks and other financialinstitutions are eliminated. These statutes include the CBN DECREE, BOFI DECREENDIC DECREE, SEC DECREE, FMBN DECREE and the money laundering Decree. Theinstitutions (SEC), Nigerian Deposits Insurance Corporation (NDIC), the centralBank of Nigeria (CBN) and the national drugs law Enforcement Agency (NDLEA).All these statutes and infrastructure are put in place to ensure safe and soundbanking operations and good financial system.The effort of members of the public in preventing and controlling bank fraud hasnot been encouraging. This may be due to slow and tortuous legal processor sheerignorance of how the fraud is perpetuated.Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionMETHODOLOGYThis study investigates the causes, effect of fraud and identifies way of preventingit in Nigerian banks. .MODEL SPECIFICATIONThe model for this study is specified as follows:1. Y = f (X1) …………….................................…….(i)Where:Y = fraud cases in banks (FRD)X1= Procedural Lapses & other causes(PL/OC) that are responsible for thefraudsThe expressions above can thus be linearly represented as:Y = Bo + B1X + Ui ….............…………………….(ii)FRD = Bo + B1PL/OC + Ui ……………………….(iii)2. Y = f (X2) …………………........................................(i)Where:Y = fraud cases in banks (FRD)X2 = bank staff (B/S) that are responsible for the fraudsThe expressions above can thus be linearly represented as:

Y = Bo + B2X + Ui ………………………...................(ii)Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionFRD = Bo + B2B/S + Ui …………………....…….......(iii)3. Y3 = f (X3) ………...................................…………..........(i)Where:Y = fraud cases in banks (FRD)X3 = Bank Performance and Fraud (BP/F)The expressions above can thus be linearly represented as:Y = Bo + B3X + Ui ……………………..................…........(ii)FRD = Bo + B3BP/F + Ui ………………………................(iii)4. Y = f (X4) …......................................…………….............(i)Where:Y = fraud cases in banks (FRD)X4 = Regulatory measures (R/M) that are responsible fordetecting,preventing and controllingfraud in banksThe expressions above can thus be linearly represented as:Y = Bo + B4X + Ui ………………………...........................(ii)FRD = Bo + B4R/M + Ui ……………………….................(iii)TYPES OF DATAThe types of data that will be used in this research include primary and secondarydata. Primary Data from Staff of the banks while secondary data are from NDICand CBN.Muhammed Umar DikkoExamination of fraud in the Nigerian banking Sector: Causes, Effect and its preventionMETHOD OF DATA COLLECTIONData will be collected from the Nigeria Deposit Insurance Corporation (NDIC),Central Bank of Nigeria (CBN) Annual Reports on frauds and staff involved in fraudcases (2006-2013) and Questionnaire will be administer to the staff of someselected Commercial banks in Nigeria. The staffs include Supervisors andManagers, Officers, and Accountant and Executive Assistants. Clerks and Cashiers,typist, technicians and Stenographers, messengers, Drivers, Cleaners, Stewardsand Security Guards, temporary Staff.POPULATION OF THE STUDY:The population for this study consists of all the 24 universal banks in Nigeria as at2014. The time frame considered for this study is 2006 to 2013 the data gathered

covers all the listed banks in Nigeria.SAMPLING TECHNIQUES AND SAMPLE SIZEMETHOD OF DATA ANALYSISSimple Regression method shall be used to analyze how bank staff contributes tothe fraud in banks for the period under review.EXPECTED RESULTS Procedural Lapses and other factors accord for bank frauds. There is a significant relationship between fraud and bank Staff There is a relationship between fraud and banking performance The regulatory measures are effective in detecting, preventing and controllingfraud in banksMuhammed Umar Dikko