A CRITICAL ANALYSIS OF FRAUD AND FORGERIES IN THE NIGERIAN BANKING INDUSTRY (A CASE STUDY OF GUARANTY TRUST HOLDING COMPANY PLC).

ABSTRACT This study critically analyzed the nature, prevalence, and institutional mechanisms for managing fraud and forgeries in Nigerian banks, with a focus on Guaranty Trust Holding Company Plc (GTCO). The study was motivated by persistent reports of insider collusion, unauthorized transactions, and weak internal reporting systems, which pose both financial and reputational risks to banks. The primary objective was to examine the mechanisms and manifestations of fraud and forgery within GTCO, while specifically identifying the most prevalent types of fraud, assessing staff perceptions of fraud risk and internal control effectiveness, evaluating the financial and reputational impact of fraud, and analyzing the adequacy of fraud reporting and regulatory frameworks. A descriptive survey design was employed, and structured questionnaires were administered to 128 staff members from departments directly involved in fraud monitoring and risk management. Data collected were analyzed using descriptive statistics and the Chi-square test for independence. Findings revealed that unauthorized transactions (32.8%) and insider-assisted fraud (27.3%) were the most prevalent types of fraud within GTCO. Although 78.9% of respondents were aware of the bank’s fraud reporting systems, only 20.3% considered them very effective, indicating a trust gap. Internal control systems were rated moderately effective by 50% of respondents, while 23.4% perceived them as weak. The study also found that 60.2% of respondents had witnessed financial loss in their departments due to fraud, and 50% acknowledged moderate reputational damage. A significant relationship was established between staff awareness of reporting channels and willingness to report fraud, highlighting the role of sensitization and system trust. The study concludes that despite existing anti-fraud mechanisms, GTCO Plc faces significant challenges in enforcement, staff training, and fraud response frameworks. Based on these insights, the study recommends the strengthening of internal controls, enhancement of training programs, deployment of advanced fraud detection technologies, and reform of the fraud reporting structure to ensure greater staff confidence and compliance