Initially, fraud (ie deliberate effort to obtain financial advantage of a person unlawfully) was become the problematic term inhibiting the proper functioning or operation of bank. As scrutinized experience bank inspectors and auditors that totally implication or hazard impact of fraud in Nigeria economy is reduction on economic growth and development (Okechukwu 2004).

Furthermore, it had caused unimaginable distress to banks in Nigeria, especially to the new generation banks. This goes long way to affect bank performance negatively.

However, the critical implication of fraud on Nigerian banks which the researcher will investigate on, are its bad effects to these three concepts, liquidity sufficiency , profitability customer and banks relationship.

1.2 RATIONALE OF STUDY:

Financial distress is easily noticeable in the Nigerian institution, Amels (1993) was defined financial distress as “a condition when the banking system as a whole has negative capital and current profit are insufficient to cover losses to such an extent that the banking system’s unable to general internally positive capital”.

It has negative impact to the bank capital and its current profits are inadequate to cover losses as well as general positive capital. (profitability` reason), subsequently, the bank will be technically insolvent (liquidity reason). However, many operators, watchers financial institution know that all is not well with a number of the operating institutions (customers / bank reason). It needs nobody to be convinced that the system is not very confortable and that some of its members are distressed and technically insolvent, while some of the others are unsound. This negative performance discourage the depositors and investors to make more deposit or inflow.

Lastly, this motivate the researcher to see these three determinant core as a crucial concept to study.

1.3 SIGNIFICANCE OF STUDY:

The concept will help the following fields or sectors in Nigeria.

(a) Bank: Firstly, to maintain their liquidity level in the banks to be able to meet the depositor demand.

(b) Customer: it maintain customers and public confidence and trust have to the bank, due to sound liquidity management and in the other hands, in service, relation e.t.c.

(c) Banking policy / rule : Where this three concept asre effectively manager, it will enable the banks to meet up C.B.N requirement. Such as especial deposit, legal required ratio e.t.c.

(d) Nigeria Economy: it will boost up Nigeria economy, due to the profits made by Nigeria bank and investment of the customer in the bank. Such as being a shareholder, but seeing first the profitability and liquidity level of such bank.

1.4 DEFINITION OF THE TERMS

1. LIQUIDITY SUFFICIENCY

This measure the ability of a bank to meet its short term obligations as when they are due for payment. For example meeting customer demand.

2. PROFITABILITY CAPACITY:

This concept measure the level of income which the banks earns from its operations. The profitability position is an made of measuring the performance of the banks. Banks are such to be maintain my adequate profitability position when their earning is high.

3. CUSTOMER AND BANKS RELATIONSHIP:

There are two terms near, customer and banks. Customer to bank is person or persons, society, from or company who termed to be customer of a bank by making offer to become a customer which the bank duly accepts.

Bank is defined as any person or corporation which are authorize to accept deposit from individual and licensed to act as financial institution by federal government to render the following service.

- Acceptance of deposit from customer

- Making payment locally or outside Nigeria

- Granting loans and advance to customers

- Securities trading

- Clearing of cheque and similar instruments for customers.

However, customer and banks relationship is where banks perform their basic obligation owned to customers which includes payment of deposit on demand, standing order activity, issuing of on his (customer) behaves etc while customer performs his own duty such as securing of the cheque book sufficient funds to the account for purpose of standing other etc.

Fraud can be defined “in its lexical meaning, as an act or course of deception deliberately practiced to again unlawful or unfair advantage, deception directed to the detriment of another” (F.I.T.C)