After just one month of operation, MTN Nigeria’s Payment Service Bank (PSB) filed a case against 18 commercial banks alleging that it had been defrauded of over 22 billion ($53 million).
The PSB informed the public of this through an originating summons issued by its attorney, Lotanna Chuka Okoli, on May 30. (SAN). It asserts that incorrect transactions it made to clients’ banks were made using its own funds, not theirs.
In an affidavit supporting the originating summons, Anthony Usoro Usoro, CEO of MoMo PSB Ltd, claimed that MoMo PSB Ltd is the rightful owner of the entire sum of 22.3 billion that is stored in its MoMo settlement account.
The MTN bank is requesting that the court issue an order requiring each of the 18 banks to individually account for the money that is still in their customers’ accounts and the money that those same customers have taken out and is no longer there.
What you should know
MTN MoMo PSB CEO Anthony Usoro Usoro claimed in the lawsuit that there were 700,000 transactions total in the fraud over the course of one month. The PSB reportedly shut down its service on May 24 after learning of the fraud to reduce future exposure.
Anthony Usoro Usoro asserted that money had been inadvertently transferred from its settlement account to other accounts handled by the 18 partner banks on or about this date after submitting the affidavit in support of the initial summons.
“The transfers were due to the fact that the plaintiff suffered system exploitation which led to the said debits. There is no transaction between the plaintiff [MoMo PSB] and the recipient account holders that warranted the transfer of the funds to those accounts.”Mr. Anthony Usoro Usoro, MTN MoMo Psb CEO
Which banks were involved
According to MTN, the 18 banks must make refunds and provide the necessary information in accordance with the Central Bank of Nigeria’s (CBN) Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, which was made in accordance with sections 2(D), 33(1)6, and 47(2) of the CBN Act 2007.
Access Bank, Ecobank, Fidelity, FirstBank, First City Monument, Guaranty Trust, Heritage, Polaris, Providus, Stanbic IBTC, Standard Chartered, Sterling, SunTrust, Union, United Bank for Africa, Unity, Wema, and Zenith Bank are a few of the affected financial institutions. These institutions have also been named as defendants in the lawsuit.
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