A Nigerian court has frozen multiple bank accounts after a Keystone Bank system malfunction artificially inflated account balances, allowing unauthorized withdrawals amounting to ₦5.7 billion. The Federal High Court in Lagos, under Justice D.E. Osiagor, issued the order on February 18, 2025, halting transactions on the affected accounts pending further hearings.
The affected accounts are spread across Opay, Providus Bank, Sterling Bank, Access Bank, Zenith Bank, TAJ Bank, GTBank, First Bank, Moniepoint, Fidelity Bank, and United Bank for Africa (UBA). According to court documents, these accounts collectively hold the disputed funds.
How the Glitch Happened
According to an affidavit sworn by Keystone Bank, the unauthorized updates occurred between February 1 and February 12, 2025. During a routine account review, bank officials discovered that certain account balances had been artificially inflated, despite no legitimate credit transactions.
A further internal investigation revealed that a technical glitch had erroneously increased balances across multiple naira-denominated accounts, enabling account holders to withdraw funds they were never entitled to.
The Money Trail
The ₦5.7 billion was funneled through 21 accounts before being transferred to various secondary recipients. Investigators are currently tracing the movement of funds and assessing the level of involvement of different banks.
A person familiar with the probe stated that investigators are distinguishing between:
- First-level beneficiaries – those who initially received the erroneous deposits.
- Second-level beneficiaries – individuals and entities who received funds after further dispersal, making the recovery process more complex.
Ongoing Investigation and Legal Implications
At this time, Keystone Bank has not responded to requests for comment. However, legal experts predict that affected banks and customers who received misallocated funds may face legal consequences. Courts could issue recovery orders requiring recipients to return the withdrawn amounts.
Similar Incidents in Nigerian Banking
This is not the first large-scale banking error in Nigeria. In January 2025, Guaranty Trust Bank (GTBank) secured a court order to recover ₦1.9 billion that had been mistakenly credited to customers following an October 2024 system failure.
Such incidents raise questions about the security of interbank settlements and the reliability of Nigerian banking infrastructure. As transaction volumes increase, there is growing concern that outdated technology and weak oversight could make the system more vulnerable to errors and fraud.
Expert Opinions on Banking Security
Despite these concerns, a banking insider, speaking anonymously, argued that these glitches are highly unusual and represent only a negligible fraction of total transactions. The insider insisted that Nigerian banks are continuously improving their security measures to prevent such occurrences in the future.
Key Takeaways
- A Keystone Bank system error led to ₦5.7 billion in unauthorized withdrawals.
- A Nigerian court has frozen accounts across multiple banks to prevent further transactions.
- Investigators are tracing the movement of funds and assessing the involvement of different banks.
- The incident follows a ₦1.9 billion mistaken transfer by GTBank in January 2025.
- Analysts warn of potential weaknesses in Nigerian banking infrastructure, while insiders claim such incidents remain rare.
As Nigeria’s banking sector continues to grow and evolve, system integrity and cybersecurity must remain top priorities. With courts stepping in to regulate and recover funds, affected customers and banks must stay updated on the latest developments.
What are your thoughts on Nigeria’s banking security? Do you think financial institutions are doing enough to prevent system glitches? Share your thoughts in the comments below!
