NIBSS Drags 45 Banks to Court to Recover N4.2bn in Unauthorised Transfers Caused by System Glitch
The Nigeria Inter-Bank Settlement System Plc (NIBSS), a key financial infrastructure provider regulated by the Central Bank of Nigeria, has approached the Federal High Court in Lagos to recover the sum of N4,190,101,636 (four billion, one hundred and ninety million, one hundred and one thousand, six hundred and thirty-six Naira) lost through unauthorized withdrawals caused by a system glitch.
In a suit filed before the court, NIBSS named forty-five financial institutions as defendants and is seeking an order mandating the banks to immediately place Post No Debit (PND) restrictions on all accounts identified as beneficiaries of the fraudulent transfers.
According to an affidavit deposed by Patience Johnson, a litigation officer at Manifield Solicitors, NIBSS is a duly registered entity with the Corporate Affairs Commission and is licensed by the Central Bank of Nigeria to facilitate interbank clearing and settlement of electronic payments.
Johnson disclosed that on September 6, 2024, a glitch occurred in NIBSS’s Instant Payments (NIP) platform, which allowed customers of the listed financial institutions to initiate unauthorized transfers to multiple accounts.
The fraudulent transactions spanned from September 6 to September 9, 2024, and were discovered around 12:30 p.m. on Monday, September 9, during routine end-of-weekend settlement processes.
The funds were routed to 176 accounts across the respondent banks. NIBSS estimates its total financial exposure from the incident to be approximately ₦13,662,138,920 (thirteen billion, six hundred and sixty-two million, one hundred and thirty-eight thousand, nine hundred and twenty Naira).
Following the discovery, NIBSS promptly reached out to the banks involved, requesting them to freeze the affected accounts. However, further investigations in collaboration with regulatory agencies and law enforcement revealed additional unauthorized transfers to a second group of unknown beneficiaries holding accounts within the same banks.
Out of the total sum, N4,190,101,636 was traced to the newly identified set of beneficiaries, while an additional N8,151,388,207.70 was traced to the initial set.
NIBSS warns that without urgent court intervention, the funds may be permanently lost.
The organisation emphasized that its interests can only be safeguarded through an immediate restriction on the involved accounts, to prevent further dissipation of the funds.
Citing the CBN Circular of September 13, 2018, on the regulation of instant inter-bank electronic funds transfers, NIBSS maintained that it has the authority to block accounts and expects full cooperation from the banks to facilitate the recovery process.
As a result, NIBSS is seeking an order from the court to impose PND restrictions on the relevant accounts pending the final determination of the case.
