ABSTRACT

 Fraud in the Nigerian Banking Industry before the recent Merger and acquisition. anrecap italization efforts was at alarming rate. It has caused many banks to collapse and many investors and depositors funds were trapped in. honestly speaking, it has become a cankerworm that has eaten deep into the fabric of the financial sector of the Nigerian Economy, that calls for the need of this study which aims at examining the impact of Banking System Fraud on the Nigerian economy and to ascertain the degree at which it has been felt by the economy. The objective of this study is to find out the relationship between banking system fraud and economic growth in Nigeria. Research questions and research hypothesis were formulated and subjected to testing to discover the signficant level of bank fraud on the Nigeria Economy. In the literature review it was discoursed that the reasons people commit fraud in banks are through; pressure, opportunity, and rationalization and also the causes of bank fraud are; weak internal control system, dishonest bank staff delays in prosecution of fraudsters and lack of punishment, low rate detection, reconciliation of voucher and unbalanced books etc. efforts at combating fraud by some institutions are through the Central bank of Nigeria (CBN), Economic and Financial &ime Commission ('EFcC), Nigerian Financial Intelligence Unit (NFIU), etc. the research methodology used were study area which is Nigeria with major concentration on Banking Industries, the source of data used were secondary data of which the data were obtained from Central Bank of Nigeria. Statistical bulletin and the Nigerian Deposit Insurance Corporation (NDJC) annual reports, multiple regression analysis and Pearson 'S Correlation Coefficient was employed to test the hypothesis formulated. The finding of the study shows that amount involved, expected loss, total number of cases and number of staff involved made significant impact on economic growth which implies that bank fraud made has not sign ijI cantly contributed to full economic growth in Nigeria. The summary of the finding shows that it leads to destruction of staff involved and loss of jobs while the closure of banks may lead to loss of banking services to the communities where the closed banks are located. On recommendation, there should be an issuance of the code of corporate governance for banks and also mandating banks to re-establish internal audit units/departments to carry out continuous audit of their operations.