TAJ Bank Abandons Legal Action After N957 Million System Glitch

TAJ Bank Ltd has quietly withdrawn a lawsuit filed to recover nearly N957.4 million that was lost in a system malfunction earlier this year. The glitch, which occurred in March 2025, resulted in unauthorized transfers to multiple customer accounts held across 26 banks and fintech platforms.

This marks the second major technical incident involving the bank, following a similar glitch in 2024 that caused the unauthorized transfer of N139.6 million.

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In court filings dated June 11, 2025, the bank had urged the Federal High Court in Abuja to freeze the accounts where the money was traced. The bank claimed the funds were wrongfully moved from its system to third-party customer accounts due to a server malfunction. Citing existing CBN regulatory guidelines, the bank sought an emergency order to freeze and reverse the affected transactions, warning of serious financial losses if the money was not recovered.

During a hearing on June 27, TAJ Bank’s legal team argued that the money was still accessible through the financial institutions involved and urged the court to prevent its dissipation. However, the presiding judge declined the request for an interim freeze, instructing that the 26 institutions be properly notified before any further orders would be considered. The case was adjourned to July 21 for hearing.

At the resumed session, the bank’s lawyer informed the court that TAJ Bank had decided to withdraw the lawsuit entirely. A notice of discontinuance, filed on July 17, was accepted by the court, and the matter was officially struck out. No reasons for the withdrawal were provided during the proceedings.

This case follows an earlier 2024 incident in which the bank received a court-ordered freeze on several fintech accounts following a similar system glitch. In that instance, a Federal High Court judge had directed that approximately N139.6 million be returned after unauthorized transfers were traced to the platform users’ accounts.

While TAJ Bank has not disclosed why it opted to abandon the latest suit, industry observers speculate that private settlements or recovery agreements may have been reached with some of the involved parties. The incident has renewed discussions about the resilience of digital banking infrastructure and the adequacy of internal safeguards against fraud and technical failures.