Lotus Bank battles to recover N1.1 billion lost over system glitch

There is disquiet in Lotus Bank following a costly technical mishap that led to the loss of N1.1 billion due to a transfer glitch.

The incident has triggered alarm over the bank’s internal controls, digital infrastructure, and risk management systems, amplifying concerns about the vulnerability of Nigeria’s rapidly expanding digital banking ecosystem.

According to an affidavit sworn by the bank’s fraud investigation officer, Gbenga Ojerinde, and filed at the Federal High Court in Lagos, the issue occurred on July 20, 2024, when a rollback fix on the bank’s e-Bills Pay platform—meant to resolve a customer complaint—caused an unexpected system glitch.

Ojerinde explained that the malfunction allowed customers with no-debit restrictions on their accounts to initiate transfers without corresponding debits being made. As a result, several customers carried out multiple transfers to various financial institutions, far exceeding their actual account balances.

The glitch reportedly affected 718 customers, resulting in an initial financial exposure of approximately ₦1,134,491,604.31. Lotus Bank subsequently sought a court order to restrict the accounts involved, warning that any delay in hearing the application “will severely and irreparably affect the business of the bank,” while offering to pay damages should the application be deemed frivolous.

The court granted the bank’s request.

Meanwhile, in connection with the same incident, one Abubakar Sani has been sentenced to one year in prison for allegedly benefiting from the glitch.

His sentencing followed an amended charge filed on April 30, 2025, before Justice Olubusola Okunuga of the Special Offences Court in Ikeja. Acknowledging his guilty plea and cooperation, the judge imposed a one-year sentence with an option of a ₦1 million fine.

Additionally, the court ordered the forfeiture of funds traced to his Access Bank and Keystone Bank accounts.

During proceedings, EFCC Prosecuting Counsel Fanen Anum stated that the bank had petitioned the Commission in July 2024, revealing that about 718 customers exploited the system failure to conduct illegal transfers.

Anum further disclosed that Sani personally benefited by transferring ₦16,684,018,000—including over ₦4 million to his brother’s Access Bank account and another ₦1 million to his own Keystone Bank account, both of which were subsequently frozen.