WEMA Bank PLC has initiated legal action against 26 financial institutions, seeking a court order to recover N888,301,598.15 allegedly withdrawn from its accounts without authorization due to a system glitch.
In a suit filed before the Federal High Court in Lagos, WEMA Bank urged the court to issue a preservative order mandating the financial institutions to return the traced funds.
System Malfunction and Unauthorized Withdrawals
The legal move follows an operational failure in WEMA Bank’s core banking system on January 16, 2025, which resulted in unauthorized transfers from customers’ accounts.
According to an affidavit by the bank’s Head of Special Review and Investigation, Kehinde Buari, the glitch triggered unintended transactions affecting accounts within WEMA Bank and external accounts held in the 26 defendant financial institutions.
Following the incident, WEMA Bank launched an internal probe to trace and recover the missing funds. While a portion was located within its system, a significant amount was found in accounts outside the bank.
Efforts to Retrieve the Funds
Investigations revealed that some recipients attempted to move or obscure the origin of the funds by transferring them across multiple accounts.
WEMA Bank swiftly alerted the affected financial institutions, urging them to restrict the implicated accounts. The proactive response of some banks led to the freezing of N888,301,598.15, pending further legal directives.
The bank engaged the Nigeria Inter-Bank Settlement System (NIBSS) to track fund movements, prompting additional correspondence with the defendant banks.
Legal Demands by WEMA Bank
WEMA Bank is now seeking a court order:
- Compelling the 26 financial institutions to return the recovered funds and any additional amounts still being traced.
- Directing the institutions to disclose details of account holders who received and dissipated the unauthorized funds for further investigation.
- Mandating the placement of affected account holders on the Central Bank of Nigeria’s Credit Risk Management System and other financial watchlists via their Bank Verification Numbers (BVNs) until full recovery.
The bank stressed that while some institutions have taken preliminary steps to restrict unauthorized transactions, a formal court order is necessary to ensure compliance and facilitate full restitution.
WEMA Bank warned that failure to secure legal directives could lead to the release of frozen funds, hindering recovery efforts.