TAJ Bank Ltd has reportedly withdrawn its legal battle after a devastating system glitch led to unauthorized transfers of ₦957.4 million across 26 banks and fintech platforms—barely a year after suffering a similar incident involving ₦139.6 million.

Despite filing a case at the Federal High Court, Abuja, the bank unexpectedly discontinued the suit on July 21, 2025, after the court rejected its motion for an interim freezing order against the 26 financial institutions involved.

Court Declines Emergency Freeze Order

According to court documents reviewed by Nairametrics, Justice Muhammad Umar refused the bank’s ex parte application to freeze the accounts where the money landed, stating that affected institutions must first be put on notice.

TAJ Bank had claimed the glitch occurred between March 9 and 10, 2025, and urged the court to help recover ₦957,394,438.94, which it said was illegally transferred due to a system malfunction. The bank described the money as having been “dissipated” by dishonest customers of the 26 banks and fintechs.

“Unless this court grants our prayers for freezing, post-no-debit, and reversal, TAJ Bank will suffer untold hardship and dire financial loss,” the bank argued through its legal counsel.

Surprise Withdrawal Raises Eyebrows

However, on the day of hearing, TAJ Bank’s legal team announced a withdrawal from the case without giving any public explanation.

“We filed a Notice of Discontinuance on July 17, 2025,” counsel T.O. Nworie informed the court.

The judge granted the request and struck out the matter.

Flashback: TAJ Bank’s 2024 Glitch

This isn’t the first time the bank has found itself in a tech-induced financial crisis. In August 2024, TAJ Bank suffered a ₦139.6 million loss after a similar glitch. The court granted its interim freezing motion then, allowing for partial recoveries.

This time, however, the court refused, and the bank appears to have backed down—possibly due to pressure, settlement talks, or unrecoverable funds.

Why This Matters

This case highlights the growing risk of digital banking failures and the legal complexities involved in recovering funds.

Dr. Tope Fasoranti, a banking and digital transformation expert, emphasized the need for tighter cybersecurity frameworks, stronger internal controls, and swift cross-platform collaboration to prevent recurrence.

“These types of glitches weaken customer confidence and expose banks to reputational and financial risks,” he warned.

Nigeria’s Growing Bank Fraud Woes

Fraud in Nigerian banks is on the rise:

  • ₦52.26 billion lost in 2024 from over 70,000 fraudulent transactions, according to NIBSS.

  • That's a 4.5x increase from the ₦11.61 billion lost in 2023.

  • Most fraud cases stem from electronic platforms and involve insider collusion or social engineering attacks.

TAJ Bank's ordeal is a sobering reminder of the urgent need to modernize digital banking infrastructure, enforce accountability, and strengthen legal response mechanisms.