Bank Accounts Frozen After Keystone Bank Glitch Leads to Billions in Unauthorized Withdrawals

A Nigerian court has moved to freeze multiple bank accounts after a system failure at Keystone Bank led to an unintended surge in account balances, allowing users to withdraw a staggering ₦5.7 billion.

Court Orders Account Freezes

Justice D.E. Osiagor of the Federal High Court in Lagos issued an order on February 18, 2025, instructing several banks to restrict transactions linked to the disputed funds. The affected financial institutions are Opay, Providus Bank, Sterling Bank, Access Bank, Zenith Bank, TAJ Bank, GTBank, First Bank, Moniepoint, Fidelity Bank, and UBA. The court ruling aims to prevent further fund movement while investigations unfold.

What Went Wrong?

An affidavit submitted by Keystone Bank detailed how the technical fault went undetected between February 1 and February 12, 2025. The glitch resulted in inflated balances on multiple naira accounts, leading to unauthorised withdrawals. A scheduled account audit eventually flagged the irregularities, prompting an internal investigation.

Bank records indicate that the ₦5.7 billion was channelled through 21 accounts before being dispersed to additional recipients. Authorities are now tracking the movement of funds and analysing the involvement of various financial institutions. Typically, initial recipients receive the erroneous deposits, which are then moved to secondary accounts, complicating recovery efforts.

Rising Concerns Over Banking Security

This is not an isolated incident. In January, Guaranty Trust Bank (GTBank) was granted a court order to recover ₦1.9 billion mistakenly credited to customers following an October 2024 system failure.

The frequency of such errors has raised questions about the robustness of banking infrastructure in Nigeria. Analysts caution that ageing systems and insufficient regulatory oversight could be exposing financial institutions to both accidental glitches and fraudulent activities. However, a banking insider, speaking anonymously, dismissed these concerns, calling such incidents “extremely rare” and arguing that they represent only a fraction of overall transactions.

As authorities continue their probe, customers and industry stakeholders are watching closely, hoping for greater safeguards against similar financial disruptions in the future.