A Nigerian court has frozen multiple accounts following a ₦5.7bn Keystone Bank glitch that led to unauthorized withdrawals and fund transfers
[dropcap]A[/dropcap] Nigerian court has frozen multiple bank accounts following a system malfunction at Keystone Bank that artificially inflated customer balances, leading to unauthorized withdrawals totaling ₦5.7 billion.
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Justice D.E. Osiagor of the Federal High Court in Lagos issued the freeze order on 18th February 2025, directing several banks to block transactions on the affected accounts pending further hearings.
The accounts, 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), are said to collectively hold the disputed funds.
According to Keystone Bank’s affidavit, the issue arose between 1st and 12th February 2025 during a routine account review, which uncovered inflated available balances not backed by any legitimate credit transactions.
Further investigation revealed a technical glitch had artificially increased balances in several naira-denominated accounts, enabling customers to make unauthorized withdrawals.
The ₦5.7 billion was allegedly funneled through 21 primary accounts before being dispersed to multiple secondary recipients, creating layers of complexity for investigators tracing the funds.
A source familiar with the investigation disclosed that authorities are now mapping the movement of funds and assessing the involvement of various banks. While Keystone Bank has yet to comment officially, the case has drawn significant attention due to its scale and implications.
This is not the first time Nigerian banks have faced large-scale transfer errors. In January 2025, another new-generation bank secured a court order to recover ₦1.9 billion mistakenly credited to customer accounts following a system failure in October 2024.
These incidents have sparked growing concerns over the safety and reliability of interbank settlement systems in Nigeria.
Analysts warn that outdated infrastructure and insufficient oversight may leave banks vulnerable to errors and potential fraud exploits, especially as transaction volumes continue to surge.
However, a banking insider, speaking anonymously, downplayed these fears, calling such glitches “highly unusual” and insisting they represent only a tiny fraction of total transactions.
As the investigation unfolds, the financial industry is under increasing pressure to address these systemic issues and prevent future occurrences.
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The case’s next court hearing is expected to shed more light on the fate of the frozen accounts and the efforts to recover the misappropriated funds.
Quadri Olaitan is a journalist and contributor to Freelanews.com, covering news, public affairs, and human-interest stories.
