E-Financial
Wema Bank Battles to Recover N888.3m which Allegedly Vanishes in Shocking System Glitch
Wema Bank PLC has taken legal action against 26 financial institutions, seeking a court order to recover N888,301,598.15 allegedly withdrawn from its accounts without authorization due to a system glitch.
The bank, in a suit filed before the Federal High Court in Lagos, urged the court to issue a preservative order mandating the financial institutions to return the funds traced to accounts held within their institutions.
In an affidavit written by Kehinde Buari, head of special Review & investigation of Wema Bank PLC, in support of an application filed before the court by a Lagos lawyer, It was alleged that, Wema Bank PLC, experienced a system glitch on one of its core banking applications on 16th of January, 2025, which resulted in the unauthorised transfer of substantial funds from accounts held with the bank, as well as accounts held with the respective financial institutions dragged before the court.
After the incident, Wema Bank PLC commenced the tracing of the funds that were transferred without due authorization. While some of the funds have been traced internally, others have been traced to accounts held with the defendants /financial institutions.
The bank’s initial investigations led to the tracing of funds to accounts held with some of the defendants.
Further investigations revealed that the recipients of these funds attempted to dissipate, hide and or obscure the same by moving part of the funds to some of the financial institutions.
The bank took immediate steps to notify the financial institutions of the glitch and the unauthorised transfers of funds from the bank’s customers’ accounts to accounts held with the defendants.
The bank requested the beneficiary accounts held with the defendants to be immediately restricted/sequestered in order to protect/salvage the bank’s customers’ funds.
Some of the financial institutions immediately restricted the beneficiary accounts and sequestered/salvaged a significant portion of the funds that were transferred out of the plaintiff’s customers without authorisation.
The total amount salvaged by the said defendants is N888,301,598.15 (Eight Hundred and Eighty-Eight Million, Three Hundred and One Thousand, Five Hundred and Ninety-Eight Naira, Fifteen Kobo)
Further to the above, the bank’s Internal Audit and Legal Teams detailed the outcome of the ongoing investigations tracing the funds moved to accounts held with the defendants as a result of the system glitch.
Accordingly, an Internal Memo dated 16 January 2025 and two summaries dated 20 January 2025 and 21 January 2025 were issued, showing:
i.Particulars of the sums transferred out of the bank’s customers’ accounts and traced to other accounts held with the bank as well as to accounts held by the respective defendant.
Particulars of the beneficiary accounts in respect of the traced sums.
iii. Particulars of the sums salvaged by the respective defendants. Respectively, copies of the bank’s internal memos, dated 20 January 2025 and 21 January 2025, have been filed before the court.
The investigation into the unauthorised movement of funds continued after the investigations conducted above.
Mr. Buari stated further that he knows that the beneficiaries/recipients of the unauthorised funds attempted to disguise/obscure the source of the said funds by dissipating the same through an intricate web of transfers.
Following the conclusion of further investigations, the plaintiff traced additional funds to the defendants.
Due to the complicated and intricate nature of the movement of the funds from Wema Bank, it became necessary to involve the Nigeria Interbank Settlement System ( NIBSS)
The NIBSS promptly exchanged correspondence with several banks on 16th January 2025 regarding funds traced to the said banks from Wema Bank as a result of the system glitch.
i.The total sums traced to and or salvaged by the respective defendants, particularly as shown in various Exhibits, ought to be returned to recovered by Wema Bank from the respective defendants.
The financial institutions/defendants ought to return to the plaintiff the total salvaged sum of N888,301,598.15 (Eight Hundred and Eighty-Eight Million, Three Hundred and One Thousand, Five Hundred and
Further to the above, the tracing of the millions of funds transferred without authorisation is still ongoing.
Wema Bank has approached this honourable court to secure an order directing and enabling the respective defendants to return the affected funds to the bank
The steps taken by the defendants are only temporary, pending the issuance of preservative, repatriation and further orders by the honourable court.
Further to the above steps, the plaintiff is required to obtain the relevant/necessary orders from this honourable court, failing which the defendants would be constrained to release the ringfenced/sequestered/salvaged funds.
Consequently, Wema Bank is seeking for:
An order directing/mandating the 26 financial institutions listed before the court to reverse/return to Wema Bank PLC the total sum of money running into Billions of Naira as appearing in Exhibits attached to the affidavit in support of the originating summons.
. An order directing/mandating each of the respective defendants to reverse/return to the plaintiff, any other/further sum of money, as may be traced and or salvaged from funds moved without authorization from accounts held with Wema Bank to accounts held with respective defendants, as a result of the system glitch that occurred on 16 January 2025.
An order directing/ mandating the respective management/ officers of the respective defendants to disclose to the plaintiff and or relevant law enforcement/regulatory agencies, all required/relevant particulars of account holders who have dissipated the sun’s transferred to their accounts without authorisation, for purposes of investigation and or recovery.
An order directing/mandating the respective
management/officers of the respective defendants to place on the Central Bank of Nigeria Credit Risk Management System List and any other Watchlist, the Bank Verification Numbers (BVNs) of all account holders who have dissipated the sums transferred to their accounts without authorisation, until the full recovery of the dissipated funds by the plaintiff.
The World Bank has predicted that Nigeria may likely see a rise in the levels of poverty over the next two years despite a moderate economic growth forecast.
The multilateral lender noted that while non-resource-rich countries are expected to continue reducing poverty and grow faster, resource-rich countries like Nigeria may drag due to declining oil prices.
”Resource-rich countries are expected to see less progress in terms of poverty reduction,” the World Bank said in its Africa Pulse report titled ‘Improving Governance and Delivering for People in Africa’.
“Importantly, poverty in resource-rich, fragile countries (which include large countries like the Democratic Republic of Congo and Nigeria) is expected to increase by 3.6 percentage points over 2022–27,” it added.
The Nigerian government has in the past two years provided various safety nets to ease the burden of the citizens, but these, on their own, may not be enough to lift millions off the poverty line.
The reforms which were implemented some 20 months ago, though came with a plethora of gains such as allowing the economy to be market-driven rather than artificial pegging, it’s nonetheless exacerbated poverty with the numbers rising from 104 million to 129 million people in a year.
According to the World Bank, Nigeria accounts for 19 percent of the share of poverty in Sub-Saharan Africa, followed by Congo, Ethiopia and Sudan with 14 percent, 9 percent and 6 percent respectively.
But despite the growing poverty, the Washington-based lender expects Africa’s most populous nation annual GDP to increase 3.6 percent in 2025 and 3.8 percent in two years. “Economic growth is expected to remain moderate in Nigeria,” the World Bank said.
“It is expected to increase from 3.4 percent in 2024 to 3.6 percent in 2025, and slightly increase to 3.8 percent in 2026–2027.”
According to the World Bank, the gradual recovery of the Nigerian economy along the forecast horizon is driven primarily by the service sector—specifically, finance, information and communications technology services, and transportation—and, to a lesser extent, a rebound in oil production that converges to its OPEC+ quota.
The World Bank’s projection is relatively higher than the International Monetary Fund (IMF) revised forecast for the nation.
IMF cuts Nigeria’s 2025 economic growth forecast downward to 3.0 percent from the earlier projection of 3.4 percent in 2024, citing weakening oil supply and escalating global trade tensions.
The two projections are however largely lower than Nigeria’s ambitious projected annual GDP growth of 4.6 percent outlined in the 2025 budget.
According to Adetilewa Adebajo, investment banker and economist Nigeria must intensify efforts towards economic diversification, infrastructure development, and asset optimisation to stimulate economic growth and attract global investments
“Sale of oil and gas JV assets to optimise equity within the FGN capital structure and balance sheet are crucial for Nigeria’s path towards sustainable development.
“Deliberate Investment projects such as the Agro Airport development and Olokola deep sea port, in Ogun State, major infrastructure projects led by companies like Arise and Dangote, need to be replicated nationwide,” Adebajo said.
Securities and Exchange Commission (SEC) has urged Nigerians to report any suspected illegal investment schemes to the commission for proper investigation and necessary action.
This is in the light of the recent collapse of Crypto Bridge Exchange (CBEX).
The Commission issued a notice on Thursday to the investing public, warning that Ponzi investment schemes pose a significant danger to the growth of the capital market.
In its latest advisory, the Commission highlighted the growing threats and risks posed by Ponzi schemes, illegal investment operations, and unregistered digital asset platforms.
It explained that fraudulent entities and individuals continue to exploit unsuspecting investors with deceptive promises of high returns, often leveraging the allure of digital assets to create a false sense of legitimacy.
“The public is strongly advised to be wary of investment opportunities that promise guaranteed or unusually high returns with little or no risk.
“These include unregistered platforms offering cryptocurrency investments, forex trading, or blockchain-based schemes, without undergoing the prescribed processes to obtain prior approval from the SEC.
“The SEC reiterates in this regard that, ‘If it sounds too good to be true, it likely is.’”
The Commission urged potential investors to conduct thorough due diligence before investing and to verify the registration status of the company or individual offering the investment through the SEC’s website.
The Commission explained that Section 196(3) of the Investments and Securities Act, 2025, criminalizes the promotion and operation of prohibited or unregistered schemes.
“This violation is punishable, upon conviction, by a fine of not less than ₦20 million or a prison term of 10 years, or both,” the Commission warned.
The SEC stated that it is fully committed to identifying and prosecuting offenders to the full extent of the law.
“We encourage the public to partner with the SEC to safeguard the integrity of the investment environment in Nigeria by promptly reporting suspected illegal investment schemes to the SEC,” the notice concluded.
The Nigerian federal government announced that the Electronic Money Transfer Levy (EMTL) generated $49.5 million in revenue, with fintech companies contributing $18 million.
This fund, as reported by the Federation Account Allocation Committee, is a considerable 56.80 percent increase over the $31.6 million earned during the same period in 2024.
Previously, the charge mainly affected established banking institutions. However, fintech firms have been included because they have contributed a phenomenal 2,507.94 percent growth in transaction values since 2020.
The EMTL is part of the government’s attempt to regulate the booming fintech sector, which completed transactions worth $29 billion in 2023 and $49.3 billion in 2024.
The EMTL was created by the Finance Act 2020 as an amendment to the Stamp Duty Act. It charges $0.03 (N50) for electronic transactions of $6.19 (N10,000) or more made through banks and financial institutions.
This tax seeks to capitalise on the increasing expansion of electronic payments, which will exceed $619.70 billion in total transactions by 2024.
In response to the burgeoning fintech sector, the government has increased its tax base, with annual EMTL collections expected to increase by 31.35 percent.
According to the Medium Term Fiscal Framework for 2025-2027, the federal government expects EMTL revenue to reach $142 million in 2025, up from $108 million in 2024.
However, industry experts have expressed concern about the potential impact of additional taxes on users.
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