Description
This document outlines the judgment delivered by Justice Amadise Michael Ekadi in Suit No: BYHC/YHC/CV/187/2025 at the High Court of Bayelsa State. The Claimant, a private school teacher, challenged an unauthorized debit from her savings account triggered by a Global Standing Instruction (GSI) mandate initiated by NIRSAL Microfinance Bank (the 3rd Defendant). Upon investigation, it was discovered that Stanbic IBTC Bank (the 2nd Defendant) had fraudulently used the Claimant’s personal data and Bank Verification Number (BVN) to open an unauthorized account, through which a ₦750,000.00 COVID-19 intervention loan was processed and illicitly withdrawn without her knowledge.
The court heavily reprimanded the banking institutions, holding that:
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Unilaterally opening an account using an unsuspecting citizen’s personal data and BVN constitutes gross negligence, a systemic failure, and a flagrant breach of trust under Section 37 of the Constitution and the NDPR 2019.
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The GSI mechanism, while useful, cannot be deployed to debit an account without a valid borrower’s mandate or prior diligence, ruling that banks must act with a duty of care.
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Financial institutions bear the evidential burden to prove credit applications and must conduct robust Know Your Customer (KYC) verifications. The court ordered the deletion of the fraudulent account records, a full refund of the debited sum, ₦300,000.00 in general damages against the 1st Defendant, ₦25,000,000.00 in exemplary damages against the 2nd Defendant, and ₦1,000,000.00 against the 3rd Defendant.
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