A Critic Of The Legal And Economic Effects Of Bank Fraud In Uganda

Table of contents

Declaration ............................................................................................................... ii

Approval .................................................................................................................. iii

Dedication ............................................................................................................... iv

Acknowledgement ..................................................................................................... v

Table of contents ..................................................................................................... vi

List of legislations ..................................................................................................... ix

Abstract. ................................................................................................................... x

CHAPTER ONE ......................................................................................................... 1

INTRODUCTION TO THE STUDY ............................................................................... 1

1.0 Introduction ....................................................................................................... 1

1.1 Background to the study ..................................................................................... 1

1.2 Statement of the Problem ................................................................................... 3

1.3 Purpose of the study ........................................................................................... 3

1.4 Objectives of the study ....................................................................................... 3

1.5 Research questions ............................................................................................. 3

1.6 Scope ................................................................................................................ 4

1.7 Significance ........................................................................................................ 4

1.9 Research methodology ........................................................................................ 4

1. 9 Review of Literature ........................................................................................... 5

CHAPTER TWO ........................................................................................................ 9

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THE FINANCIAL SECTOR IN UGANDA ........................................................................ 9

2.1 Overview of Uganda's financial sector .................................................................. 9

2.2 The financial sector regulatory environment of Uganda ........................................ 11

2.3 Loophole in Uganda's financial sector .................................................................. 13

2.4 Bank Fraud History in Uganda ............................................................................ 14

CHAPTER THREE ..................................................................................................... 18

FORMS AND CAUSES OF FRAUDS ............................................................................. 18

3.1 Cheque fraud .................................................................................................... 18

3.2 Credit and debit cards ........................................................................................ 21

3.3 Deposit slip scam .............................................................................................. 22

3.4 Money laundering .............................................................................................. 23

3.5 Mobile money scam ........................................................................................... 24

3.6 Causes of Fraud ................................................................................................ 28

CHAPTER FOUR ...................................................................................................... 31

CONTROL OF FRAUD INITIATIVES ........................................................................... 31

4.0 Introduction ...................................................................................................... 31

4.1 Fraud Identification ........................................................................................... 31

4.2 Fraud Prevention and Detection mechanisms ...................................................... 32

4.3 Fraud Management mechanism .......................................................................... 33

4.4 Consumer Education/ training ............................................................................ 35

4.5 Fraud Detection Systems ................................................................................... 36

4.6 Other major online fraud prevention measures .................................................... 37

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4.6 Bank of Uganda recommended Preventive measures- FIA .................................... 39

CHAPTER FIVE ........................................................................................................ 41

FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ............................................... 41

5.1 Findings ............................................................................................................ 41

5.2 Conclusion ........................................................................................................ 41

5.2 Recommendations ............................................................................................. 42

Abstract

This research explores a critic of the legal and economic effects of Bank Fraud in Uganda. The Uganda financial system is currently composed of both regulated and nonregulated

institutions. The central bank is mandated to regulate, supervise and discipline financial institutions in order to maintain their safety and soundness. The financial system supports the economy since it is the vehicle through which savings are mobilized and then channeled to investment. This intermediation role can only be successful if the general public has trust in financial institutions, especially confidence in ensuring safety of the deposits. The regulated segment is composed of fifteen commercial banks, seven credit institutions, and three Micro-Finance deposit taking institutions, insurance Companies and the Stock exchange. This research has managed to investigate on Uganda's financial sector, the loopholes in Uganda's financial sector and the history of Bank Fraud in Uganda. Bank frauds take various forms ranging from alteration of cheques and 1 or counterfeit to skimming or cloning of cards. It further investigated the forms and causes of Fraud including cheque fraud, credit card and debit card fraud, deposit slip scam and money laundering, mobile money scams and other causes of fraud in the country. The research further examined the measures that can help in fraud control such as fraud identification, prevention and detection, fraud management mechanism and consumer education/training programmes including online fraud detection systems and recommendations and findings from the Bank of Uganda and other financial institutions have been analyzed to come up with a conclusion and recommend necessary measures to the concerned stakeholders