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Challenges of accountability in Nigeria: the role of deposit money bank

Babajide, A. A and Lawal, Adedoyin Isola and Amodu, L. O. and Asaleye, Abiola John and Ewetan, O. O. and Olokoyo, F. O. and Matthew, Oluwatoyin (2020) Challenges of accountability in Nigeria: the role of deposit money bank. Journal of Money Laundering Control, 23 (2). pp. 477-492.

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practices, thereby resulting in high-level corruption cases in the banking sector. The purpose of this study is to investigate the short- and long-run linkages between bank net interest income and deposit liabilities interacted with corruption, to establish the influence of corruption in deposit mobilisation drive of banks in Nigeria. Also, the study analysed the causal relationship between selected bank variables and fraud. Design/methodology/approach – The study used quarterly data on selected variables from 1Q 1993 to 4Q 2017 sourced from Nigerian Deposit Insurance Corporation (NDIC) annual reports and Central Bank of Nigeria (CBN) Statistical Bulletin of various issues. Deposit Money Bank various deposit liabilities are interacted with a corruption index and used as the independent variables, while bank earnings serve as the dependent variable. Error Correction Model (ECM) and Engel Granger approach to co-integration technique were used to analyse the data. Findings – The findings reveal that various bank deposit liabilities interacted with corruption index has a negative effect on bank profitability in the long run, though only corrupt fixed deposit is statistically significant at the 5 per cent significance level. Bank total asset, total loan and advances and fraud have a significant effect on bank profitability at 1 and 10 per cent significance level. The findings also reveal that banks profit from corrupt fixed deposit and demand deposit in the short run. Social implications – Text Originality/value – The literature is awash with bank lending corruption and various institutional factors such as competition among banks, credit bureau and information sharing about borrowers, bank supervisory policies, loan loss provisioning, bank ownership structure and regulatory environment and anti-corruption measures. The aspect of deposit mobilisation and corruption has not been well researched in literature; this study, therefore, fills the gap in the literature by examining the extent deposit money banks contributed to corruption in Nigeria through their cutthroat deposit mobilisation drive.

Item Type: Article
Uncontrolled Keywords: Bank fraud, Challenges of accountability, Demand deposit corruption, Deposit money bank, Savings deposit corruption, Term deposit corruption
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mrs Patricia Nwokealisi
Date Deposited: 28 Oct 2020 13:31
Last Modified: 28 Oct 2020 13:31

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