Bank Fraud and Malpractice: Sources, Forms and Causes

BANK FRAUD AND MALPRACTICE: SOURCES, FORMS AND CAUSES

This issue of fraud and malpractice have becomes a serious food for though for many incorporated bodies in recent times.  As a result, more time is spent in board meeting in an attempt to find solution to the persistent fraudulent practices among management and non-management staff.  It sis worth of note, that while much has been said and written about frauds and malpractice, its effect and methods of preparations are increasing daily.

Based on this, the researcher laid hands on some comprehensive and communicable write up on the subject mater.

2.1     WHAT IS FRAUD AND MALPRACTICE

It is pertinent to note, that fraud and malpractice are two words of the same meaning but distinct room legal point of view.

Malpractice are civil of wrong doings where as frauds are mainly criminal offences.  So an act of malpractice may constitute a criminal offences such as falsification of accounts, alternation of records or documents, manipulations etc. however, the research work will deal mainly with or an fraud as it most widely known.

 

  • SOURCES, FORMS AND CAUSES

SOURCE

Alhaji E. Bello, Chief Inspector of the Bank of the North Ltd. On the occasion of the 18th yearly seminary for the Nigeria Institute of Bankers (NIB) held in  Kano in 1986 identified two major reasons for and malpractice in Nigeria banking industry.  These are as follows: –

  1. fraud and forgery involves professional workers who are thoroughly conversant with the baking system and procedures and who seeks to enlist the support and corporation of the dishonest members of the bank staff;

 

  1. the men of the underworld who are particularly involved in bank frauds are always ahead of the bank’s planning and it is invariably difficult to predict when and how they will strike;

CAUSES

          They cause of fraud and malpractice is usually grouped into two major classes:

  1. Institutional Factors and
  2. environmental/Society Factors

INSTITUTIONAL FACTORS:  Are those traceable to the internal environment of the banks while

ENVIRONMENTAL/SOCIETY FACTOR:  Are those which result from the influence of the environment society on the banking industry.  These causes includes:

  1. Volume of work: the amount of work done by the bank officials could use so heavy that fraud could easily pass undetected in time by such officials;

 

  1. Number of Staff: Fraud maybe caused by the existence of few official supervisors;

 

  1. Another causes of fraud and major malpractices is inadequate or lack of staff training.

 

ENVIRONMENTAL SOCIETAL FACTORS:  It facilitate fraud and malpractice, these have been identified.

  1. SOCIETAL VALUE: The main cause so fraud in the society is dishonest.
  2. POLICE INADEQUATE IN HANDLING CASES OF FRAUD: It is believed in the society that fraudsters know how they can always have their way through the police.

2.3     THE EFFECT OF BANK FRAUD AND MALPRACTICE

The consequences of frauds and malpractice in banks are very grave.  To this end, this section shall concentrate in the consequence of fraud and malpractice on the banking system, the bank depositions in particular and the entire economy.

The effect of banks fraud and malpractice are as follows:

  1. UNWARRENTED LOSSES

Fraud and malpractice lead to unwarranted losses to the bank.  Also valuable document and assets of the banks are lost as a result of the fraud and malpractice.

  1. INCONVENIENCE IN BANKING SERVICE

Nowadays, there are rigid procedures and more elaborate security system within the bank, with a body to forestalling fraud and malpractice.

  1. MANAGEMENT TIME CONSUMING

An attempt of fraud required a thorough investigation by the management.  This investigation involves a lot of time resolving in less time being spent on other mattes.

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2 Comments on “Bank Fraud and Malpractice: Sources, Forms and Causes”

  1. Can we get names of firms that investigate financial malpractice in nigeria

  2. Can we get names of firms that investigate financial malpractice in nigeria

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