Lotus Bank Limited has filed a lawsuit before the Federal High Court in Lagos against 45 Nigerian banks, seeking to recover a total sum of ₦1.13 billion allegedly lost following a major system glitch on its E-Bills Pay platform.
According to court filings, the bank alleged that the incident occurred on July 20, 2024, after a “rollback fix” was executed on its electronic payment system, leading to a technical malfunction that enabled hundreds of customers to make unauthorized withdrawals and transfers far beyond their available balances.
The bank claimed that 718 customers took advantage of the system failure to move funds into accounts domiciled across various financial institutions, prompting Lotus Bank to initiate legal action against the receiving banks.
The defendants include some of Nigeria’s leading commercial and fintech banks such as PalmPay Payment Services Ltd, Moniepoint Microfinance Bank Ltd, OPay Digital Services Ltd, Guaranty Trust Bank Ltd, Access Bank Plc, Zenith Bank Plc, Wema Bank Plc, United Bank for Africa Plc, Kuda MFB Ltd, FairMoney MFB Ltd, Sterling Bank Ltd, and First Bank of Nigeria Ltd.
Others joined in the suit are Stellas Digital Bank Ltd, Renmoney MFB Ltd, Unity Bank Plc, FCMB Ltd, Jaiz Bank Plc, Polaris Bank Plc, Keystone Bank Plc, Stanbic IBTC Bank Plc, Fidelity Bank Plc, Providus Bank Ltd, TAJ Bank Ltd, Union Bank Plc, Ecobank Nigeria Ltd, Sparkle MFB Ltd, Kredi Money MFB Ltd, Alternative Bank Ltd, Paystack Payments Ltd, and Momo Payment Settlement System Ltd.
Legal Grounds and Reliefs Sought
In the Motion on Notice, filed pursuant to Order 3 Rules 1, 6, and 9 of the Federal High Court (Civil Procedure) Rules 2019, Lotus Bank is asking the court to determine whether the defendant banks are legally obligated—under Central Bank of Nigeria (CBN) guidelines and circulars including BPS/FIRGEN/CIR/02/004 (2015) and BPS/FIRGEN/CIR/05/011 (2018)—to place an immediate lien on the accounts of customers who benefited from the unauthorized transfers.
The bank is also seeking a declaration that, in line with these CBN regulations, the defendant banks are required to refund all funds illegally transferred into their customers’ accounts and remit them back to Lotus Bank, where the balances remain recoverable.
Furthermore, Lotus Bank is praying the court to declare that all 45 financial institutions have a statutory duty to safeguard the financial system from fraud, act swiftly upon detecting system abuse, and prevent the continued retention or spending of illegally obtained funds.
The bank is also asking for an order compelling the defendant banks to refund ₦1,133,808,604.31—or any portion that can still be recovered—into Lotus Bank’s accounts pending full restitution.
Affidavit Details
The motion is supported by a 19-paragraph affidavit deposed to by Mr. Gbenga Ojerinde, a Fraud Investigation Officer with Lotus Bank.
According to Ojerinde, the “system glitch” occurred during a scheduled maintenance activity, leading to a rollback error that mistakenly permitted customers to execute transfers to other financial institutions without their accounts being debited.
“The outcome was that certain customers made multiple transfers to accounts held with the defendant banks in excess of their balances with Lotus Bank,” Ojerinde stated.
He added that the incident was promptly reported to the Nigeria Inter-Bank Settlement System Plc (NIBSS)—the national platform responsible for coordinating and reconciling interbank settlements—to initiate recovery processes.
Ojerinde further noted that some of the beneficiaries have refused to refund the wrongly credited funds, thereby compelling the bank to approach the court to prevent “unjust enrichment” and ensure that all wrongly transferred amounts are retrieved.
“It is in the interest of justice, equity, and fairness that the reliefs sought by the plaintiff are granted,” he affirmed.
Next Steps in Court
The case has been assigned to Justice Daniel Osiagor of the Federal High Court in Lagos. During the last hearing, the judge adjourned the matter to December 2025 for further proceedings after some of the defendant banks entered formal appearances and began filing their responses.
Legal analysts note that the case could set a major precedent in Nigeria’s financial sector, especially concerning the responsibility of banks and fintechs when system errors lead to interbank fund movements.
Lotus Bank, which operates under Islamic (non-interest) banking principles, has maintained that it took immediate steps to rectify the system error, alert regulators, and commence the recovery process. The bank emphasized that the lawsuit was necessary to preserve the integrity of Nigeria’s digital payment ecosystem and ensure that no party benefits from an unintended system malfunction.
Background on the Incident
The E-Bills Pay platform—a Central Bank of Nigeria initiative used by commercial banks for electronic bill payments—has been widely adopted by financial institutions and government agencies for processing taxes, utilities, and other payments.
Sources within the financial sector said the July 2024 glitch briefly disrupted transaction logs, allowing certain customers to make transfers that bypassed real-time debit validation checks. The issue was reportedly identified and contained within hours, but by then, substantial amounts had already been moved to other institutions.
Industry experts say such cases highlight the rising operational and cybersecurity risks in Nigeria’s rapidly expanding fintech ecosystem, where millions of transactions are processed daily across multiple digital platforms.
If the court rules in favour of Lotus Bank, the 45 defendant institutions may be required to trace and freeze the beneficiary accounts and refund the disputed ₦1.13 billion, either in part or full, depending on the recoverable amounts.
For now, the banking industry is closely watching the proceedings, which could influence future CBN compliance directives on how financial institutions handle erroneous or fraudulent interbank transfers triggered by internal system failures.
