E-Financial
Judiciary, Banks Chase Shadows as another Banking Crisis Looms
Nearly ten years ago the Central Bank of Nigeria conducted a deep assessment of the country’s banks.
The 2009 exercise exposed large-scale fraud committed by a number of CEOs.
To save the banking system from collapse, the Central Bank (CBN) took over a number of institutions and spent billions saving others.
According to Quartz, in addition, criminal charges were laid against five CEOs for offences which included fraud, market manipulation, concealment and grant of credit facilities without adequate security.
Only one case has been prosecuted successfully. The others appear to be stuck in an unending cycle of dismissals, appeals and re-trials.
The bank saga and the failure to bring the bank executives to justice underscore the fact that the Nigerian justice system isn’t working.
Quartz, said that the problems – the subject of a great deal of discussion – range from judicial corruption to a lack of judicial independence to delays in the justice system.
The cases of the bank executives provide a useful case study through which to examine the weaknesses of the Nigerian judicial system.
These include the capability of prosecutors and the ability of the court system, including judges, to actually bring cases to fruition. This is particularly true in corporate cases which are often difficult to prosecute under the criminal law.
Judicial Corruption
According to Quartz, the fact that Nigeria has a number of corrupt judges is common knowledge in the country. Over the years, there have been various allegations of corruption in the judiciary.
In 2013, two High Court judges were suspended and recommended for retirement by the National Judicial Council for misconduct bordering on corruption.
Similarly, in 2016, a raid carried out by the Department of State Services revealed that cash worth USD$800,000 had been found in the homes of senior judges suspected of corruption.
Judicial corruption reduces public confidence in the country’s justice system. This means that suspected incidents of directors’ misconducts are less likely to be reported given the prevailing belief that justice is unlikely to be served.
Similarly, it can affect the attitude of investigators and prosecutors who might have less incentive to investigate and prosecute cases diligently.
While it would clearly be an exaggeration to accuse all judges in Nigeria of corruption, it is reasonable to conclude that corruption remains a problem. But since none of the judges involved in the trial of the bank executives have been accused of corruption, it’s necessary to look to other causes for the failure to bring the bank executives to book.
Judicial delays
One of the main problems in the bank executive cases has been endless delays in the judicial process. The trials’ time line tells the story.
Godwin Emefiele, CBN Gov
Criminal proceedings started in 2009. About six years later, in 2015, the Court of Appeal struck down the case against two of the executives on the basis of lack of jurisdiction of the trial court.
A declaration of lack of jurisdiction means that the court lacks the power to try the particular case. In itself this isn’t a bad development. After all, compliance with relevant rules on jurisdiction is essential to ensuring justice is done. But the fact that it took six years for this decision to be reached highlights severe delays in Nigeria’s court system.
Following the Court of Appeal’s decision, the High Court, in deference to the superior court, dismissed the pending case against the third bank executive.
In another turn of events, a year later, in 2016, the Supreme Court overturned the Court of Appeal’s decision and ordered a re-trial of the bank executives. This meant that, nearly 10 years after the initial trial, a fresh trial was started, and with it room for further appeals.
There is currently no end in view. While appeals and cross appeals are inevitable parts of litigation, the lengthy time spent on them is not.
This delay has been attributed to several factors. Initially, the trials suffered from several unwarranted adjournments at the request of the defence lawyers.
Another weak spot has been the prosecuting authority. The unit responsible for prosecuting these kinds of cases, The Economic and Financial Crimes Commission, has been severely criticised for its inefficiencies.
To worsen the problem, the trial judges were changed several times. One judge was elevated to the Court of Appeal while a few others were transferred to different divisions of the court leading to a fresh trial each time.
These issues significantly delayed trial proceedings.
Potential inequality
Another question to consider is whether the failure to successfully prosecute the directors is a reflection of the difference in the treatment of high-profile offenders versus ordinary Nigerians.
Cecilia Ibru, the only bank executive who was convicted, was sentenced to just six months in prison and required to forfeit shares and other assets worth over USD$1.2 billion.
Compare this with the case of David Olugboyega, an armed thief, who was sentenced to death after being found guilty of a £50 robbery.
Granted that armed robbery carries the death penalty, however, it seems that carting away millions of money should attract a stiffer penalty.
In addition, rich offenders can afford well skilled lawyers who can devise different strategies to delay, or prevent, successful prosecution. Poor offenders don’t have this benefit.
The ConversationThe recently introduced Administration of Criminal Justice Act of 2015, which aims to promote speedy dispensation of justice, promises to improve the situation. Time will tell.
Federal Capital Territory High Court has ordered Stanbic IBTC Bank Limited to pay N15 million in damages to two former customers after finding that the bank unlawfully retained and processed their personal information after they had terminated their banking relationship.
In a judgment delivered on July 29, Justice Kayode Agunloye also directed the bank to erase all personal data belonging to the claimants that it is not legally required to retain and restrained it from further processing or using such information without lawful authority or the customers’ consent.
The court held that the bank breached the Nigeria Data Protection Act (NDPA) 2023, the claimants’ constitutional right to privacy under Section 37 of the 1999 Constitution (as amended), and provisions of the Federal Competition and Consumer Protection Act (FCCPA).
The suit, marked CV/2190/25, was filed by David Ogundipe and Salami Tolulope Ibrahim, who argued that Stanbic IBTC continued to process their personal data for marketing purposes even after they had closed their corporate account with the bank.
According to the claimants, the account was shut following unresolved issues with the bank.
Despite the closure, they alleged that Stanbic IBTC continued sending promotional emails and text messages to their personal and corporate email addresses as well as their telephone numbers.
The customers said their solicitors later wrote to the bank demanding that all marketing communications cease and that their personal data should no longer be processed for promotional purposes.
Although the bank reportedly acknowledged the request and assured them that the messages would stop, the unsolicited communications allegedly continued, prompting them to seek judicial intervention.
In his ruling, Justice Agunloye held that once the banking relationship had ended and the customers had withdrawn their consent, the bank no longer had any lawful basis to process their personal data for marketing activities.
The judge ruled that the continued use of the claimants’ information amounted to an infringement of their constitutional right to privacy and constituted an unfair trade practice under the FCCPA.
The court consequently ordered Stanbic IBTC to delete all personal information relating to the claimants that it is not legally required to retain and to cease every form of data processing except where permitted by law or regulatory obligations.
Justice Agunloye also granted a perpetual injunction restraining the bank, its officers and agents from retaining, processing, transmitting or using the claimants’ personal data for marketing, promotional or any other unauthorised purpose.
While the claimants sought N250 million as damages, the court awarded N15 million as general damages, describing the amount as adequate compensation for the persistent unsolicited communications, the bank’s failure to honour requests for data erasure and the violation of the customers’ privacy rights.
The bank was further ordered to pay N500,000 as the cost of the suit, while the claim for N7 million as litigation expenses was dismissed for lack of sufficient proof.
Justice Agunloye directed that all monetary awards would attract 10 per cent post-judgment interest annually until fully settled.
However, the court declined to order the complete deletion of every record relating to the claimants, holding that banks remain under statutory obligations to retain certain customer records in compliance with financial regulations and anti-money laundering laws.
Reacting to the verdict, counsel to the claimants, O.E. Oluwadamisi of Earnest Attorneys LP, described the decision as a landmark judgment for data protection in Nigeria.
He said the ruling reinforces the mandatory nature of compliance with the Nigeria Data Protection Act and makes it clear that organisations cannot continue processing customers’ personal information after consent has been withdrawn unless authorised by law.
One of the successful claimants, David Ogundipe, welcomed the judgment, saying it represented a victory not only for the litigants but also for millions of Nigerians whose personal information is held by corporate organisations.
He expressed hope that the ruling would encourage institutions across the country to strengthen compliance with data protection laws and place greater respect on customers’ privacy rights.
The number of Bank Verification Numbers (BVNs) on the Nigerian banking industry’s fraud watchlist reached 13,117, according to the Central Bank of Nigeria (CBN).
This is coming as banks strengthen efforts to detect and prevent financial crimes.
According to the CBN’s 2025 Annual Report and Statement of Accounts, the number of BVNs on the banking industry’s fraud watchlist increased from 9,476 in 2024 to 13,117 in 2025. This represents a 38.4 per cent increase.
The apex bank explained that commercial banks, including Access Bank, Zenith Bank, United Bank for Africa (UBA), and other financial institutions, added 3,641 new BVNs to the watchlist during the year.
The report said the increase reflects stronger fraud monitoring, improved compliance, better risk management, and enhanced systems for detecting suspicious transactions.
It added that the higher number does not necessarily mean fraud has increased, but shows banks are becoming more active in identifying and blocking suspicious activities.
The report also revealed that consumer lending declined for the first time since 2019.
Outstanding consumer credit dropped by 19.89 per cent, falling from N4.72 trillion in 2024 to N3.78 trillion in 2025.
The CBN attributed the decline to high interest rates, which made borrowing more expensive for many Nigerians.
Personal loans recorded the biggest drop, falling to N1.85 trillion.
However, retail loans rose by 63.77 per cent to N1.94 trillion, making them the largest category of consumer credit for the first time in several years.
Central Bank of Nigeria (CBN), has ordered banks to refund a total N19.12 billion to customers for illegal deductions and poor complaint handling.
This is coming as bank customers lodged 23,129 complaints against financial institutions in 2025, representing 11 per cent increase over the previous year.
The apex bank also imposed N1.69 billion in penalties on financial institutions for regulatory breaches, poor complaint handling and failure to comply with its directives, according to its 2025 Annual Report.
The CBN attributed the increase in complaints to growing public confidence in its consumer protection framework rather than a deterioration in banking services.
The report stated: “The Bank received a total of 23,129 complaints from consumers of financial services in 2025, a rise of 10.53 per cent above the 20,925 in 2024. The trend reflected increased awareness and improved confidence in the Bank’s consumer complaint resolution process.”
The apex bank added: “A total of 18,824 complaints were resolved, indicating a 9.36 per cent increase over the 17,213 complaints resolved in 2024.”
On the value of disputed transactions, the CBN said: “Total claims in local currency increased to N40.61 billion from N17.13 billion in 2024. Foreign currency claims also rose, reaching $344.2 million compared with $1.06 million in the preceding year.”
According to the report, “Based on the resolved complaints, the sums of N19.12 billion and $329.3 million were refunded in 2025, compared with N9.66 billion and $0.67 million in 2024.”
The CBN said it strengthened enforcement against erring financial institutions during the year.
It stated: “During the review period, the Bank imposed 11 penalties on financial institutions totalling N1.26 billion for infractions ranging from regulatory breaches and failure to respond to regulatory queries.”
The report further disclosed: “In addition, the Bank imposed 21 penalties on financial institutions to the tune of N430 million for infractions ranging from delays in resolving customer complaints to failure to comply with the Bank’s directives.”
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