A Federal High Court sitting in Ikoyi, Lagos has been asked to intervene in a suit filed by Lotus Bank Limited seeking to recover the sum of N1,133,808,604.31 allegedly withdrawn by hundreds of its customers following a system failure that affected the bank’s electronic payment platform in July.
In its motion on notice filed before Justice Daniel Osiagor, the bank alleged that 718 customers fraudulently withdrew and transferred funds exceeding their account balances after it experienced a system failure, codenamed a “system glitch,” on July 20, 2024.
According to the bank, the glitch resulted from a rollback fix on its E-Bills Pay platform, which temporarily disabled automatic debit processes.
The bank stated that during the system failure, the affected 718 customers made successful withdrawals and transfers even though they knew their account balances were insufficient to cover the transactions.
To recover the funds lost due to the system glitch, Lotus Bank dragged 45 banks before the court over what it described as a massive financial woe.
The suit, according to the bank, was filed pursuant to Order 3 Rules 1, 6 and 9 of the Federal High Court (Civil Procedure) Rules 2019 and under the court’s inherent jurisdiction.
The bank is seeking the determination of the following questions:
Whether, having regard to the Central Bank of Nigeria (CBN) Guidelines No. BPS/FIRGEN/CIR/02/004 of 2015 and BPS/FIRGEN/CIR/05/011 of 2018, particularly Sections 10.2.2–10.2.4, 10.3 and 10.4 of the CBN Regulations, the 1st to 45th defendants are not mandated to place a lien on the sums standing in the accounts of their respective customers listed in Exhibit 1.
Whether the bank is not entitled to a refund of all funds illegally transferred into the respective accounts of the 1st to 45th defendants’ customers where such funds are still available.
Whether, where the funds in the customers’ accounts are insufficient to cover the illegally transferred sums, the defendants are not mandated to place a lien on any of the remaining sums domiciled in any of the banks until the entire amount is fully repaid to the plaintiff.
Upon determination of these questions, Lotus Bank is praying the court for the following reliefs:
A declaration that the defendants have a duty to protect the banking and payment industry from abuse by dishonest users and to take reasonable steps to prevent damage to the financial system whenever fraud or abuse is brought to their attention.
A declaration that the plaintiff is entitled to a refund of all funds illegally transferred into the defendants’ customers’ accounts where such funds are still available.
An order directing the 1st to 45th defendants to immediately reverse and remit to the plaintiff the aggregate sum of N1,133,808,604.31 or any amount subsequently recovered until the entire amount is fully paid.
And any further orders the court may deem fit in the circumstances.
The motion is supported by a 19-paragraph affidavit deposed to by Gbenga Ojerinde, a Fraud Investigation Officer with the bank, along with a written address and documentary exhibits.
Some of the banks listed as defendants have already filed their responses to the suit.
Justice Osiagor adjourned further hearing to December 2025.
In the affidavit, Lotus Bank averred that:
The glitch allowed customers to initiate transfers to other banks without their accounts being debited.
The total exposure from the incident is N1.13 billion, as detailed in Exhibit 1.
The issue was reported to the Nigeria Inter-Bank Settlement System Plc (NIBSS).
The beneficiaries retained the funds and failed to reverse them despite knowing they were not entitled to the credits.
The bank stated that the court’s intervention is required to recover the funds and prevent the beneficiaries from unjust enrichment.
The post “Fraudulent Transfers After Glitch” — Lotus Bank LTD Seeks Court Order To Recover ₦1.13bn From 718 Customers, 45 Banks appeared first on TheNigeriaLawyer.