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The study was conducted at the CRDB Bank and NMB Bank Public Limited
Companies at headquarters and branches located in Dar es Salaam. The study was on
assessment of fraud and its management in commercial banks in Tanzania. The
specific objectives of the study were to analyze the nature/ types of frauds in banks
and establish why fraud occurs. It was also aimed to establish adequacy and
effectiveness of internal controls in managing frauds in banks and was sought also to
evaluate impacts of frauds in banks business and suggest measures on how to
manage and reduces the impacts in banks. Following the definition of the problem,
literature study was done in order to get insights of the problem.
The research methodology used was the survey study, which took six months. The
design used enabled the researcher to collect data to the targeted organization and
questionnaires, interviews and documentary sources were used as tools of data
collection.
Data collected were analyzed careful by using both quantitative and qualitative
techniques, in quantitative technique percentages were used for analysis of data and
the results showed that Cheque Fraud, computer frauds, card frauds, theft of assets,
misappropriation of customers money from their account, cheque kitting, financial
statement fraud, fund diversion frauds, frauds related to accounts fraudulently
opened, and frauds resulted by delaying clearing instruments are types of frauds
occurring in Tanzania commercial banks.
Other classes of frauds in Tanzania commercial banks revealed were frauds related to
overstatement of collateral value when customers applied for bank loans. Frauds
related to manipulation of foreign exchanges and ghost loans- loans issued against
forged collaterals.
Internal controls were found adequate in some areas/ processes, however were not
effective. In some areas/ processes were controls were adequate were not effective as
sometimes management tends to override them to commit fraud. In some instances, |
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