A Nigerian court has taken drastic measures to contain a massive financial fallout, freezing multiple bank accounts after a Keystone Bank transfer glitch mistakenly credited ₦5.7 billion to various recipients. The incident has raised concerns about the vulnerabilities of the country's banking system, particularly with regards to interbank settlements.

Justice D.E. Osiagor of the Federal High Court in Lagos granted a motion on February 18, 2025, ordering banks to block transactions on the affected accounts until further hearings. The accounts, spread across Opay, Providus Bank, Sterling Bank, Access Bank, Zenith Bank, TAJ Bank, GTBank, First Bank, Moniepoint, Fidelity Bank, and United Bank for Africa (UBA), collectively hold the disputed funds, according to court documents seen by TechCabal.

The erroneous transfers occurred between February 9 and 11, 2025, but the exact cause of the glitch remains unclear. Some financial insiders believe it may have been a processing error, while others suspect a coordinated exploitation of system loopholes. The incident has sparked concerns about the potential for fraud and the need for stronger oversight in the banking sector.

According to a source familiar with the case, banks that received the initial deposits—classified as first-level beneficiaries—may have unknowingly redistributed the money to other financial institutions, creating additional layers of complexity. This has raised questions about the ability of Nigerian banks to safeguard interbank settlements, especially as transaction volumes surge.

This is not the first time a Nigerian bank has been caught in a large-scale transfer error. In January, Guaranty Trust Bank (GTBank) secured a court order to recover ₦1.9 billion mistakenly credited to customer accounts following an October 2024 system failure. Such cases are highlighting the need for banks to invest in more robust infrastructure and implement stronger security measures to prevent similar incidents in the future.

Despite these concerns, a banking insider who requested anonymity pushed back on these concerns, calling the incidents "highly unusual" and insisting they represent only a negligible fraction of total transactions. However, the frequency and scale of these errors are likely to continue sparking debate about the reliability and security of Nigeria's banking system.

Keystone Bank did not immediately respond to a request for comments on the incident. As the investigation continues, the banking sector will be watching closely to see what measures are taken to prevent similar incidents in the future and to restore confidence in the system.

The incident serves as a stark reminder of the importance of robust security measures and rigorous testing of financial systems to prevent such errors. As the Nigerian banking sector continues to evolve, it is crucial that banks prioritize investment in infrastructure and security to ensure the integrity of their systems and protect their customers' funds.