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ABSTRACTFraud is generally perceived as an enemy in the modern business world. Frauds are neither new nor peculiar to the banking industry. What is new is their increasing growth since the 1980 fueled by the great desire of most Nigerians to get risk quickly without working. Prior to the 1980s, bank frauds generally involved a few transactions perpetuated by a single or a small group of individuals. Losses were small to the victim institution. Banks have since the 1980s become persistent targets of fraudsters. This study therefore, set out to determine the causes of bank frauds in Nigeria as perceived by bank workers and bank customers, assess the impact of some of the perceived causes on amount of bank frauds committed between 1980 and 2003, and suggested measures for the prevention/reduction of bank frauds.The study employed an expost facto research design with a two-state sampling approach. First, banks were stratified by their generations, sixty and forty-five branches of new and first generation banks respectively were randomly selected from the South-East, South-West, and South-South political zones of Nigeria. Second, banks were stratified by relationship with the bank (worker versus customer), age, and sex. A 24 item Likert-type instrument was administered on 1000 subjects of which 865 were correctly completed. The instrument was designed to obtain information on bank frauds as perceived byrespondents. It has a cormback reliability coefficient, alphas of 0.708. Secondary data on bank frauds committed between 1989and 2003 were collected from the Nigeria Deposit Insurance Corporation (NDIC) and the Central Bank of Nigerian (CBN). Data from bank workers and bank customers were subjected to Factory Analysis and Analysis of variance to identify and classify the perceived causes of bank frauds and to determine the influence of respondent’s attributes (relationship with bank, generation of bank, age and sex) on level of their perception of the causes of bank frauds. Data from the NDIC and the CBN were also subjected to co-integration techniques to determine the impact of some of he causes on amount of frauds committed within the period of the study.The results revealed that 21 of the suggested causes were perceived as causes of bank frauds by respondents. They were classified into three groups and were arranged hierarchically within each group. The first group consisting of 12 items could be described as social-cultural/institutional factors that demand urgent attention by the government and the banking industry. The second group of five items could be described as operational/management factors that could be addressed directly by the banking industry. The third group of 4 items could be weakly/remotely linked to bank frauds.It was revealed that 5,619 fraud cases were reported between 1989 and 2003. A total of N59,898,000 was involved over the period of the study.
