A Nigerian court has ordered the freezing of multiple bank accounts following a system malfunction at Keystone Bank that artificially inflated account balances, leading to unauthorized withdrawals totaling ₦5.7 billion.
According to court filings, Justice D.E. Osiagor of the Federal High Court in Lagos granted a motion on February 18, 2025, to block transactions on the affected accounts until further hearings. The accounts, spread across 13 banks, collectively hold the disputed funds.
The glitch occurred between February 1 and February 12, 2025, when a routine account review uncovered inflated available balances that did not match any legitimate credit transactions.
Further investigation revealed that technical glitches had artificially increased balances across multiple naira-denominated accounts, enabling unauthorized withdrawals.
The ₦5.7 billion was funneled through 21 accounts before being transferred to various secondary recipients. Investigators are now mapping out the movement of funds and assessing the level of involvement of various banks.
This incident raises concerns about the safeguarding of interbank settlements in Nigeria, particularly as transaction volumes surge. Analysts warn that outdated infrastructure and weak oversight could be making the system more prone to errors and fraud exploits.
