CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The level of fraud in the present day Nigeria has assumed an epidemic dimension. Frauds in the banks are not new. They are as old as the industry itself. However, like in the greater society, they have become one of the most impracticable problems of modern days banking, while the concern of the banking community is growing by day and management vigilance is growing with the help of computerization among others. It is one record that millions of money are being lost to fraud and forgeries on a daily basis. While some of the fraud and forgeries are the handwork of outsiders, others are perpetrated by the staff and sometimes managements of the banks concerned.

In Nigeria alone a recent presented by an NGO shelter Rights initiatives (SRI) stated that a report by regulatory bodies made public revealed that in the monthly June, and July 2002, 12 banks had already reported fraud cases worth N10.3 billion to the Central bank of Nigeria (CBN) and the National Deposit Insurance Corporation (NDIC).

Many of these staff committing these frauds are young, ambitions and talented while some of them inherently honest if the temptation is present and the need is urgently coupled with the likehood of successful committing the fraud, some will succumb to the temptation.

The major goals of most profit oriented companies like bank is to make profit. Banks will make more money if it eliminates the chances of fraud and forgeries itself in the banking system. In detecting frauds and preventing it, frauds will be minimized in banks, and by so doing, the maximize profit.