Professionalism in banking is violated when ethical or legal fundamentals are breached or blatantly disregarded. Ethics is a strong code of morality, which for an occupation such as banking, plays an important role in the well being of individuals, businesses, national and international economies. Unethical conduct manifests itself in various ways, including insider abuse, fraudulent dealings; irregularity/inaccuracy in rendition of reports, these are problems bordering on business ethics as evident in the Nigerian banking crisis. A multiple regression analysis was used and from the summary of the finding, we can infer that the consequences of insider dealing and problem of business ethics can be disastrous and could result in loss of confidence and trust in the industry, loss of business for the institutions, shareholders, board/management disputes, operational losses, distress of the sector, and liquidation of institutions, capital flight, and stagnation of the economy.
INTRODUCTION
Traditionally, the role of banks whether in a developed or developing economy, consists of financial intermediation, provision of an efficient payments system and serving as conduit for the implementation of monetary policies.
In view of the importance of the banking sector in economic development and the imperfections of the market mechanism to mobilize and allocate financial resources to socially desirable economic activities of our nations, challenges confronting the industry relate to operating environment, inherent weaknesses in the conduct and practices of practitioners bordering on ethics and integrity otherwise referred to as weak corporate governance and inadequate legal provisions. Unethical conduct manifests itself in various ways, including insider abuse, fraudulent dealings, irregularity/inaccuracy in the rendition of statutory returns, window dressing of accounts. According to Akingbola E “The systemic distress of the early 90s in the Nigerian banking industry was induced by insider abuse, widespread malpractices, and mismanagement resulting in the liquidation of various banks and other financial institutions” .The thrust of this study is therefore to look into Insider dealings and how it bothers on Business Ethics in the Nigerian Banking Industry.
Broadly, these issues relate to the industry’s operating environment, inherent weaknesses in the conduct and practices of practitioners bordering on ethics and integrity.
The study is with particular reference to the Nigerian Banking Industry. This is to consciously beam a search-light on the sector’s activities with a view to ensuring that operators play by the rules of the game and imbibe sound and safe banking practices. Furthermore, such an oversight is intended to assist supervisory authorities in timely identification of deterioration in bank financial conditions before it degenerates to threaten the stability of the banking system or even the economy.