his study, effective internal controls system as an antidote for distress in banking industry in Nigeria, was carried out to ascertain the role of effective internal controls system can play in the reduction or total elimination of distress in the banking sector in Nigeria. A survey research design was adopted in which fifty six workers of selected deposit money banks were used and data were collected using questionnaire. Four research hypotheses were raised and tested; while the demographic information of the respondents were analysed using simple percentage, the hypotheses were tested using t-test statistic at a significant level of 5%. The testing of the hypotheses revealed that: existence of effective internal controls system has positive effect on fraud elimination in banks; effectiveness of internal controls system can be accurately ascertained; effective internal controls system has great impact on accuracy and reliability of records of banks and distresses in banks were traced to non-adherence to established internal controls system. Based on the findings, it was recommended that banks should employ competent professional accountants to take charge of their internal controls functions, as it is only the existence of functional/effective internal controls system that can serve as means of thoroughly checking and preventing mismanagements, which usually lead to distress, in banking industry.