By Stephen Simon
The Nigeria Inter-Bank Settlement System Plc (NIBSS) has approached a Federal High Court, Lagos, seeking urgent orders to freeze accounts linked to alleged unauthorized transfers amounting to N13.66 billion traced to customers of 19 financial institutions following a major glitch in its payment platform.
NIBSS Plc in an originating motion filed before the court, is seeking orders directing the affected banks to immediately place Post No Debit (PND) restrictions on accounts alleged to have received funds generated through unauthorized transactions.
The respondents in the suit include Access Bank Plc, Ecobank Nigeria Limited, FairMoney Microfinance Bank, First City Monument Bank Ltd, Fidelity Bank Plc, Globus Bank, Guaranty Trust Bank, Kuda Microfinance Bank, Lotus Bank Limited, Moniepoint Microfinance Bank, Parallex Bank, Polaris Bank Limited, Providus Bank Limited, Sterling Bank Ltd, TAJ Bank, Titan Trust Bank, United Bank for Africa Plc, Wema Bank Plc and Zenith Bank Plc.
NIBSS is also seeking orders directing the banks to place liens on all accounts linked to the Bank Verification Numbers (BVNs) of the beneficiaries, place the BVNs on a watchlist pending full recovery of the funds, and reverse all sums allegedly traced to the beneficiaries.
According to an affidavit filed in support of the application, NIBSS stated that it experienced a system glitch on September 6, 2024, affecting its Nigeria Instant Payment (NIP) engine and allegedly enabling unauthorized transfers into accounts maintained with the respondent banks.
The company said the glitches resulted in an “unexpected behaviour” that allowed customers of the respondent banks to receive transfers without corresponding debit instructions from originating accounts, a situation described in banking operations as “Dry Posting.”
Court documents indicated that the unauthorized transactions allegedly occurred between September 6 and September 9, 2024, largely during weekend transactions.
NIBSS alleged that the transfers were routed into 176 accounts domiciled with the respondent banks.
“The financial exposure of the Applicant from this incident is in the sum of N13, 662, 138, 920. 00, billion” the affidavit stated.
NIBSS Plc further told the court that upon discovering the transactions, it immediately contacted the banks and requested them to place PND restrictions on the affected accounts where the funds had allegedly been traced.
However, NIBSS claimed that the banks insisted on obtaining a court order before restricting the accounts of the affected customers.
The company argued that unless the accounts are immediately restricted, there is a risk that the funds may be dissipated, thereby frustrating efforts to recover the allegedly unauthorized transfers.
NIBSS also relied on the Central Bank of Nigeria’s 2018 Regulation on Instant (Inter-bank) Electronic Funds Transfer Services, particularly Clause 10, which it said empowers the organisation to seek cooperation from financial institutions in recovering disputed electronic transfer funds.
The company maintained that the orders sought were necessary to ensure the “complete and total recovery” of all funds allegedly wrongfully credited to the beneficiaries named in the suit.
NIBSS urged the court to grant the application in the interest of justice
