Many everyday account holders unknowingly spent the mistaken credits only to face legal action nearly two years later.
One Friday evening in September 2024, money suddenly showed up in bank accounts across Nigeria. It wasn’t sent by anyone, and no one lost funds to pay for it. A glitch in the national transfer system simply created money out of nowhere.
By the time anyone noticed, the money had already become rent, school fees, stock for market stalls, groceries, and in at least one case, a weekend’s worth of relief for a trader who’d been waiting weeks for a client to pay up.
Twenty months later, in May 2026, the Nigeria Inter-Bank Settlement System (NIBSS) went to the Federal High Court in Lagos asking to freeze every account linked to the 176 people who received it.
This is how it happened and why “who pays for a system’s mistake” isn’t as simple a question as it sounds. SWIPE →
How Instant Transfers Actually Work
When you send money in Nigeria and see it land in seconds, that speed is partly an illusion because NIBSS doesn’t move real cash bank-to-bank the instant you hit “send.”
It runs on deferred net settlement: your bank records a debit, the receiving bank records a credit, and NIBSS settles the net difference between all participating institutions four times a day through their accounts at the Central Bank of Nigeria.
The scale this system now operates at is almost impossible to picture. According to the Central Bank of Nigeria’s 2025 Annual Report, the value of e-payment transactions rose to ₦3.458 quadrillion in 2025, more than triple the ₦1.078 quadrillion NIBSS recorded for 2024.
Digital transfers exploded in Nigeria as more people used electronic payments for everyday spending. In just one year, the total volume of transactions processed annually jumped from 11.27 billion in 2024 to nearly 48 billion in 2025, according to the CBN’s 2025 Annual Report.
To put that amount of money in perspective, Nigerians transferred over ₦3.4 quadrillion with most transfers finishing in under ten seconds.
Because the platform handles tens of billions of transfers a year, even a tiny system glitch can cause massive damage. Just a few seconds of a software error can instantly create or lose billions of naira before anyone catches it.
Between September 6 and 9, 2024, a technical fault hit the NIBSS Instant Payment (NIP) engine. This is the platform underneath most of the country’s interbank transfers.
According to NIBSS’s affidavit to the court, the glitch caused “unexpected behaviour” that allowed customers to receive transfers without any corresponding debit instruction from an originating account.
This is a situation banking operations teams call “dry posting.” Put simply: the money wasn’t transferred from another account since a computer error created it out of thin air.
It landed in 176 accounts across 19 banks and microfinance institutions, including Access Bank, Ecobank, FairMoney, FCMB, Fidelity Bank, Globus Bank, GTBank, Kuda, Lotus Bank, Moniepoint, Parallex Bank, Polaris Bank, Providus Bank, Sterling Bank, TAJ Bank, Titan Trust Bank, UBA, Wema Bank, and Zenith Bank.
Most of the bad transactions happened over the weekend, when fewer staff were working to monitor and reconcile the accounts. That delay gave the glitch more time to spread before anyone noticed.
Why The Money Didn’t Come Back
NIBSS asked the 19 banks to freeze the affected accounts almost immediately after discovering the error. However, the banks insisted on obtaining a court order before restricting any customer account with Nigerian case law backing their caution.
A Court of Appeal ruling, First Bank of Nigeria v. DKN Investments & Ors, established that only a court can freeze a customer’s account and banks that act unilaterally expose themselves to liability. First Bank learned this the expensive way in an earlier, unrelated case, when it was ordered to pay ₦10 million in damages for freezing an account without judicial backing.
So the banks waited. Meanwhile, people kept spending the money and since the funds looked like regular bank alerts, most people had no idea it was a glitch.
For close to two years, ₦13.66 billion sat in a legal grey zone while NIBSS worked through banks to trace where it had gone.
Reports differ on how much money was lost. One account says that out of the glitch, ₦8.15 billion was traced but couldn’t be recovered, while another ₦4.19 billion was gone completely.
Separately, court filing coverage from Lawyard specifically shows NIBSS approaching the Federal High Court to recover ₦4,190,101,636 lost through unauthorised withdrawals caused by the glitch which aligns closely with the ₦4.19 billion “gone for good” figure above.
A quick note on the numbers: The split between what was lost and what might be recovered hasn’t been fully confirmed yet.
However, multiple news outlets and official reports do agree on the bigger picture: ₦13.66 billion total was affected across 176 accounts and 19 banks.
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In May 2026, NIBSS filed an originating motion at the Federal High Court in Lagos, naming all 19 institutions and seeking orders directing the banks to immediately place Post No Debit (PND) restrictions on accounts alleged to have received funds generated through the disputed transactions.
NIBSS isn’t just asking to freeze the accounts as court documents show they want to:
• Lock all bank accounts linked to the recipients’ Bank Verification Numbers (BVNs).
• Put those BVNs on a watchlist until the money is fully paid back.
• Take back any money that can be traced to the recipients.
If the court approves this request, it will freeze every bank account that person owns in Nigeria, since BVNs link all of a person’s accounts together.
In short: one system glitch could completely lock 176 people out of all their money, no matter which bank they use.
NIBSS’s affidavit describes the incident as a system glitch that produced “unexpected behaviour.” But several outlets reporting on the same court filings describe the transfers themselves as “unauthorized.”
Word choice really matters here. Calling it a “glitch” makes it sound like a computer error, while calling it an “unauthorized transaction” makes it sound like the person getting the money did something wrong.
That distinction is the exact logic NIBSS uses in its court filings. But even though NIBSS tags these as “unauthorized,” they aren’t actually accusing those 176 people of theft. In fact, NIBSS admits the whole mess was caused by a bug in its own system.
But the legal remedies it’s pursuing (BVN watchlisting, nationwide freezes, treating the funds as “unauthorised” rather than simply “erroneously credited”) functionally treat the beneficiaries the way a bank would treat suspected fraud recipients, not blameless bystanders of a system failure.
That gap between the technical cause and the legal remedy is where most of the public anger in this story comes from.
NIBSS’s Unusual Legal Position
What makes this case unusual is that NIBSS isn’t actually a bank and it doesn’t hold customer money or give out loans.
Instead, it acts like a digital traffic controller. Owned by the Central Bank and Nigeria’s commercial banks, NIBSS exists simply to move money between different banks, not to keep it.
Now, NIBSS is suing to get back money it never actually lost. Its own software created the funds out of nowhere, and people spent it completely unaware of the system error they had no way of seeing or controlling.
NIBSS is citing the Central Bank of Nigeria’s 2018 Regulation on Instant (Inter-bank) Electronic Funds Transfer Services, particularly the clause it says gives it authority to seek bank assistance in recovering disputed transfers, as its legal basis for the case.
Whether that regulatory authority genuinely extends to a nationwide, BVN-linked freeze over a system-generated error, as opposed to a targeted fraud recovery, is now squarely a question for the court to decide.
Nearly two years later, if many of those 176 people can’t pay the money back, who actually loses out and pays for the mistake?
In a normal failed transfer, the sender is debited and the recipient isn’t credited, so the imbalance is temporary and reversible. Dry posting is structurally different as the debit side never happened at all. No sender anywhere lost money to fund these transfers.
The beneficiary banks credited accounts with what looked like normal transfers, but no matching money was ever debited on the other end.
Because NIBSS must balance its books with the Central Bank four times a day, it had to cover the ₦13.66 billion gap using its own reserves or funds from its bank-owners just to keep the banking system moving. Ultimately, any money that can’t be recovered becomes a real loss for NIBSS and its owner banks, including the very institutions that originally refused to freeze the accounts due to the legal risks now unfolding in court.
The pattern behind this incident isn’t new:
• 2023: A NIBSS-related processing issue reportedly compounded a ₦21 billion incident at Flutterwave.
• January 2026: A system glitch at First Bank erroneously credited a customer with over ₦1.3 billion. The bank petitioned the EFCC, which has so far recovered and returned ₦802.4 million of it.
• 2025: Nigerian banks lost ₦25.85 billion to fraud, down 51% from ₦52.26 billion in 2024. But while traditional fraud is dropping, software errors like “dry posting” are a totally different problem that standard fraud numbers don’t even track.
Nigeria’s digital banking system has a history of glitching in two big ways: creating fake money or freezing real money. Neither problem shows up in normal fraud reports, even though both disrupt the economy.
2026 has brought a cluster of separate disruptions:
• April 16, 2026: a nine-hour, 26-minute outage hit all outward transfers, direct debits, Pay-with-Transfer, and virtual accounts.
• May 13, 2026: fintech platforms including Carbon and Konga reported delayed transactions nationwide due to “intermittent failures” on the NIBSS platform, with one banking source describing the entire transfer system as being “at a near halt.”
• May 20, 2026: a similar disruption affected outward and inward transfers, according to status reports from payment processors like Monnify
• May 26–27, 2026: on the eve of Eid al-Adha, NIBSS crashed again. The outage crippled bank transfers and delayed holiday funds for thousands of customers right when they needed them most.
Industry sources attribute these recurring failures to outdated systems struggling under rapid transaction growth, rushed upgrades, and poor third-party integration. In response, the CBN stepped in by December 2025, ordering PoS processors to use dual connectivity and automatic backup routing to keep payments moving during outages.
When the system breaks down against ordinary people, they deal with stuck transfers and missing funds during everyday purchases or big investments, with zero compensation.
But when the same kind of glitch breaks in their favour, some of those people end up facing federal lawsuits for “unjust enrichment” after spending money their own banking app told them was theirs.
It’s worth holding both truths at once. NIBSS’s error doesn’t make the ₦13.66 billion anyone’s money since nobody earned it, and a mistaken credit alert was never a gift. But NIBSS also sat on the mistake for twenty months without calling it back, and money that sits untouched that long, especially for people just trying to get by, starts to feel less like an error and more like something already forgotten, or already theirs.
That’s the core issue: while people shouldn’t keep money that isn’t theirs, NIBSS shouldn’t punish ordinary account holders for a 20-month delay that NIBSS caused. NIBSS made the mistake and it should absorb the financial loss instead of treating customers like criminals.
This isn’t just about 176 people facing legal trouble over accidental funds but about a ₦1 quadrillion payment system breaking down and leaving everyday users to defend themselves in court, while the powerful institutions behind the failure avoid the same level of blame.
If a software error credited your account with money you never requested, and you spent it before anyone told you it was a mistake, should the law treat you as a fraud suspect, or as a victim of a system failure?
Drop your thoughts in the comments section.
