Examining the Effect of Fraud Practices on the Stability of Deposit Money Banks in Nigeria

Abstract

The study looked at how fraud affected Nigeria's deposit money banks' stability. The study included 60 observations on a quarterly basis throughout a 15-year period, from 2009 to 2023. The Nigeria Deposit Insurance Corporation (NDIC) and Global Financial Data Bulletin annual reports served as the secondary source of data, from which the information was taken. Autoregressive distributed lag was the estimating method employed (ARDL). It was discovered that the value of fraud has a short- and long-term detrimental but considerable impact on the stability of Nigeria's deposit money banks. On the other hand, in the medium and long terms, the quantity and frequency of fraud cases have a small but favourable impact on the stability of Nigeria's deposit money institutions. Therefore, the study concluded that fraud is a danger to the economic survival of Nigeria's DMBs because it undermines consumer confidence and trust, which may result in a loss of clients and prospective investors. Considering this, to preserve the viability of deposit money institutions, managers of such banks should implement efficient procedures to stop, identify, and deal with fraud.

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