NIBSS sues banks, seeks order to freeze accounts over N13.66bn unauthorized transfers

The Nigeria Inter-Bank Settlement System Plc (NIBSS) has approached the Federal High Court in Lagos, seeking approval to freeze accounts allegedly linked to suspicious transactions totaling N13.66 billion across multiple banks in Nigeria.

In the suit, NIBSS is asking the court to authorise Post No Debit (PND) restrictions on accounts said to have received funds through what it described as unauthorized transfers caused by a technical malfunction on its payment platform.

The financial institutions listed in the application include Access Bank, Ecobank Nigeria, FairMoney Microfinance Bank, First City Monument Bank, Fidelity Bank, Globus Bank, Guaranty Trust Bank, Kuda Microfinance Bank, Lotus Bank, Moniepoint Microfinance Bank, Parallex Bank, Polaris Bank, Providus Bank, Sterling Bank, TAJ Bank, Titan Trust Bank, United Bank for Africa, Wema Bank, and Zenith Bank.

NIBSS is also seeking an order directing the banks to place liens on accounts linked to the Bank Verification Numbers (BVNs) of the affected customers, flag them for monitoring, and assist in recovering the funds.

According to court documents, the incident arose from a system malfunction that occurred on September 6, 2024, on the Nigeria Instant Payment (NIP) platform.

The agency explained that the glitch led to abnormal transaction processing, which resulted in credits being posted to customers’ accounts without corresponding debits from originating accounts, a situation it described as “dry posting.”

NIBSS said the affected transactions occurred between September 6 and September 9, 2024, and were traced to 176 accounts across the financial institutions involved.

It stated that the total exposure from the incident stands at N13.66 billion.

The agency further told the court that it immediately notified the affected banks after discovering the anomaly and requested that the accounts be restricted to prevent the funds from being withdrawn or transferred.

However, it claimed the banks declined to place restrictions without a court order.

NIBSS argued that unless urgent intervention is granted, there is a risk that the funds may be dissipated, making recovery difficult.

It also cited provisions of the Central Bank of Nigeria’s regulations on electronic fund transfers, stating that it is empowered to collaborate with financial institutions in tracing and recovering disputed transactions.

The company is therefore urging the court to grant its application in order to safeguard the integrity of the national payment system and ensure recovery of the disputed funds.