TAJ Bank withdraws legal battle over N957 million system glitch amid ongoing fraud concerns

TAJ Bank has suffered another system glitch that resulted in an unauthorized transfer of over N957 million to accounts in 26 different banks and fintech platforms earlier this year. This incident happened in March 2025, nearly a year after a similar glitch moved about N139.6 million from the bank’s system.

TAJ Bank initially took legal action at the Federal High Court in Abuja, seeking orders to freeze these accounts and reverse the transfers. The bank claimed the money was illegally debited following the server glitch and asked the court to stop further withdrawals and ensure the funds were returned under Central Bank of Nigeria (CBN) regulations. The bank argued that without these legal protections, it would face serious financial losses caused by customers of the other institutions taking advantage of the flaw.

However, the court declined the bank’s request for an interim freezing order in June 2025, stating the involved banks and fintechs deserved to be fully notified. When the case resumed in July, TAJ Bank unexpectedly withdrew the suit and the matter was struck out by Justice Muhammad Umar, with no public explanation for the withdrawal.

This latest issue follows a 2024 ruling where an interim freezing order was granted against some fintech entities holding funds stemming from a previous glitch at TAJ Bank. That order required the reversal of N139.6 million until the dispute was resolved.

System glitches like this create complex legal challenges for banks and also stress the importance of robust security and better cooperation among financial institutions to protect customers’ funds. Fraud losses in Nigerian banks have sharply increased, with N52.26 billion lost in 2024 alone, mostly through electronic channels.

Dr. Tope Fasoranti, an economist and digital transformation consultant, emphasizes the need for safer banking practices, stronger cybersecurity, and joint efforts from all stakeholders to prevent fraud and maintain trust in Nigeria’s digital financial system.

The withdrawal of TAJ Bank’s reversal suit leaves questions about the future handling of the N957 million glitch and the protection of affected customers’ assets.