Lotus Bank Limited has filed a lawsuit against 45 financial institutions at the Federal High Court in Lagos. The suit seeks the recovery of N1,133,808,604.31 (One Billion, One Hundred and Thirty-Three Million, Eight Hundred and Eight Thousand, Six Hundred and Four Naira, Thirty-One Kobo), which the bank claims was illicitly transferred due to a critical system failure on its E-Bills Pay platform.
The incident unfolded on July 20, 2024, when a routine “rollback fix” – intended to resolve prior user complaints – triggered an unintended glitch.
This malfunction enabled 718 Lotus Bank customers to execute unauthorized withdrawals and interbank transfers exceeding their account balances, without any debits being applied to their accounts.
The exploited vulnerability allowed these customers to siphon funds into accounts held at the defendant institutions, effectively creating “erroneously retained credits” that remain unrecovered.
Defendants in the Crosshairs
The roster of defendants spans major commercial banks, microfinance institutions, and fintech players, reflecting the interconnected nature of Nigeria’s payment ecosystem. Key institutions named include:
Traditional Banks: Guaranty Trust Bank Ltd (GTB), Access Bank Plc, United Bank for Africa Plc (UBA), First Bank of Nigeria Ltd, Zenith Bank Plc, Fidelity Bank Plc, Union Bank of Nigeria Plc, Ecobank Nigeria Ltd, FCMB Ltd, Wema Bank Plc, Unity Bank Plc, Jaiz Bank Plc, Polaris Bank Plc, Keystone Bank Plc, Stanbic IBTC Bank Plc, Providus Bank Ltd, and TAJ Bank Ltd.
Microfinance and Digital Banks: Moniepoint Microfinance Bank Ltd, Kuda Microfinance Bank Ltd, FairMoney Microfinance Bank Ltd, Sterling Bank Ltd, Stellas Digital Bank Ltd, Renmoney MFB Ltd, Sparkle MFB Ltd, Kredi Money MFB Ltd, and Alternative Bank Ltd.
Fintech and Payment Services: PalmPay Payment Services Ltd, OPay Digital Services Ltd, Paystack Payments Ltd, and Momo Payment Settlement System.
These entities are accused of holding the disputed funds in beneficiary accounts, with Lotus Bank alleging they failed to act on notifications of the fraud.
Legal Arguments and Relief Sought
Lotus Bank’s motion on notice, filed under Order 3 Rules 1, 6, and 9 of the Federal High Court (Civil Procedure) Rules 2019, invokes the court’s inherent jurisdiction and cites key Central Bank of Nigeria (CBN) regulations. Specifically, it references:
CBN Guideline No. BPS/FIRGEN/CIR/02/004 (2015) on fraud prevention and detection.
CBN Guideline No. BPS/FIRGEN/CIR/05/011 (2018) on electronic fraud management.
Sections 10.2.1–10.4 of the CBN Regulations, which mandate banks to place liens on suspicious accounts, reverse unauthorized transactions, and safeguard the payment system against abuse.
The suit poses three core questions for the court’s determination:
Are the defendants obligated to impose liens on the affected customer accounts under the cited CBN guidelines?
Is Lotus Bank entitled to a full refund of the illegally transferred funds where they remain intact in beneficiary accounts?
In cases of partial insufficiency, must defendants lien remaining balances until full recovery?
Upon affirmative answers, Lotus Bank seeks:
A declaration affirming the defendants’ statutory duty to combat fraud and protect the banking system.
An order for immediate reversal and refund of the full N1.13 billion, or any recoverable portion thereof.
Joint and several liability among all 45 defendants.
Such further relief as the court deems just.
The originating affidavit, deposed by Gbenga Ojerinde, a fraud investigation officer at Lotus Bank, details the glitch’s mechanics and the bank’s prompt reporting to the Nigeria Inter-Bank Settlement System Plc (NIBSS) – the central hub for interbank interoperability.
Despite this, Ojerinde avers, the beneficiaries retained the credits without debit reversals, entitling Lotus to restitution.
Court Proceedings and Next Steps
Several defendants have submitted responses contesting the claims, though specifics remain under seal.
Justice Daniel Osiagor, presiding, has adjourned the matter for further hearing in December 2025, allowing time for full briefs and potential interim reliefs, such as account freezes.
This case underscores escalating risks in Nigeria’s fintech boom, where rapid digital adoption outpaces safeguards.
Industry watchers anticipate it could set precedents for liability in system-induced errors, potentially influencing CBN policy on glitch recoveries.
Lotus Bank, a non-interest ethical institution founded in 2021 and headquartered in Lagos, emphasized in a statement that the suit prioritizes customer protection and systemic integrity.
“We remain committed to innovative, Sharia-compliant banking while upholding the highest standards of security,” a spokesperson noted.
The full exhibit schedule, detailing affected accounts and transfer breakdowns, was attached to the suit but not publicly disclosed.