Call to CBN for stronger regulatory action on unresolved frauds and irregularities

By Ayodele Oso

In recent years, Nigerian bank customers have faced a troubling wave of frauds, unauthorized transactions, excessive charges and administrative lapses by financial institutions. Many of these issues, escalated to the Central Bank of Nigeria’s Consumer Protection Department (CPD, recently re-named Consumer Protection and Financial Inclusion Department), have lingered unresolved for months or even years—despite reminders, physical visits to CBN branches and clear evidence of bank negligence or collusion.

This pattern of delay not only inflicts direct financial harm on victims but also questions the CBN’s effectiveness as a robust enforcer. Before escalation to the regulator, affected customers typically exhaust internal bank complaint channels without success, as required by CBN’s Consumer Protection Regulations. Yet, when matters reach the CBN, resolution often drags, sometimes triggering secondary issues like Post-No-Debit restrictions or time-bar limitations.

Below are few documented cases which highlight systemic lapses:

• Estate Fraud at First Bank of Nigeria Plc (FBN, 2005 origin, reported to CBN March 2022): Executors of a deceased customer’s estate reported a ¦ 39.365 million fraud involving misleading entry that moved funds into a “fixed deposit account” lacking customer’s instructions without accrued interest or deal slip provided. Despite engagement as consultants, reporting to CBN CPD in March 2022, reminders and a visit to the Abeokuta branch, the CBN directed FBN in early 2023 to credit N73.5 million (principal plus some interest). However, FBN imposed a lingering Post-No-Debit (PND) restriction. A November 2025 follow-up to CBN demanding over ¦ 50 million in additional interest per the Monetary Policy Guidelines has met with silence from the regulator to date. This case spans over two decades from the initial irregularity, yet redress remains incomplete till date.

•Signature Bank Limited Fraud (Port Harcourt/Aba, reported to CBN May 2025): Over N30 million was siphoned from a client’s account due to alleged poor internal controls and lax KYC, with officials reportedly colluding to open a parallel account in Aba Branch. Funds were credited on April 30, 2025 and withdrawn the same day. Multiple reminders to CBN CPD and Ibadan Branch have yielded no meaningful action up till now.

•Guaranty Trust Bank Plc (GTB) Unclaimed Balances Debit (reported to CBN late April 2025): US$183.50 was debited from a customer’s account and transferred to an unclaimed balances account at CBN as far back as January 2025. Despite the customer fulfilling reactivation and ownership formalities, the funds remain trapped between GTB and CBN, even after reminders and escalation to the Ibadan branch.

•Excessive Charges on Loans at GTB (Abuja private school, reported November 2021): GTB applied excessive debit interest and charges on loan facilities. Though CBN eventually resolved the matter after nearly a year, the customer suffered significant losses due to the regulator’s 6-year time bar policy on most complaints (effective from the transaction date). 

These examples are not isolated. They reflect broader challenges: even with decentralization of the CPD to CBN branches nationwide, customers encounter the “usual delays.” Banks often fail in core duties – robust KYC compliance, accurate interest accrual on deposits (including fixed deposits per Monetary Policy Guidelines), timely reversal of erroneous debits and transparent handling of unclaimed funds. Customers lose not just principal but compounded interest, business opportunities and faith in the system.

The CBN’s framework is sound on paper. The Consumer Protection Regulations require banks to maintain independent complaints units, issue tracking numbers, resolve issues promptly, refund excess charges with interest a-nd provide root cause analyses. Escalation to CPD is permitted after bank timelines lapse (typically 4 weeks). 

The CBN emphasizes fair, transparent and timely resolution. Recent initiatives, including directives for quicker fraud investigations and refunds, plus reported resolutions of thousands of complaints with billions in refunds in 2025, show intent. Fraud losses in the system have also declined in some periods due to industry efforts like the Nigeria Electronic Fraud Forum.

However, enforcement appears inconsistent. Prolonged muteness on escalated matters, failure to lift undue restrictions (like PNDs) and slow follow-through on directives send the wrong signal. This risks moral hazard: banks may prioritize cost-saving over controls, knowing regulator intervention can be protracted. In a country striving for cashless efficiency and inclusion, such lapses disproportionately harm individuals, estates, schools and SMEs – groups critical to economic growth.

Why stricter treatment is imperative: Fraud and irregularities threaten financial system integrity. Weak oversight can fuel bigger risks, including money laundering vulnerabilities or loss of depositor confidence. The CBN’s mandate includes entrenching fair conduct and resolving complaints expeditiously. Treating these with “kid gloves” contradicts that role and the push for a trusted, inclusive banking sector.

Possible Remedies and Recommendations:

Stricter Timelines and Accountability for CBN CPD: Introduce binding service-level agreements (e.g. acknowledge complaints within 3-5 days, mediate/resolve high-value cases within 30-60 days). Publish quarterly performance reports on complaint volumes, resolution rates and average timelines, including escalations from specific banks. Penalize internal delays where feasible.

Stronger Sanctions on Erring Banks: Beyond directives to credit accounts, impose meaningful monetary penalties (as seen in other CBN guidelines for operational defaults – often starting in millions of naira, with daily accruals). Publicly name banks with high unresolved complaints or repeat offenses. For collusion or weak controls (e.g., lax KYC enabling instant withdrawals), trigger deeper investigations, license reviews and possible director-level money-based indemnities.

Review and Streamline the 6-Year Time Bar: While it excludes fraud and pre-lodged cases, ensure practical application doesn’t disadvantage victims due to regulatory delays. Waive where Banks fail to resolve after initial complaints and CBN inaction contributed to passage of time. Mandate interest/compensation calculations per Monetary Policy Guidelines without protracted disputes.

Enhanced Transparency and Technology: Deploy a centralized, digitized complaint portal with real-time tracking (beyond current email/letter channels to cpd@cbn.gov.ng or branch submissions). Require banks to report fraud promptly and share data via platforms like NIBSS for faster tracing. For unclaimed balances, establish clear, time-bound release protocols once ownership is verified.

Customer Empowerment and Prevention: Launch aggressive public education on rights, red flags (e.g., unsolicited account openings) and escalation paths. Mandate banks to strengthen internal controls, with regular CBN audits focused on high-complaint areas.

The institutional heist in FBN has lingered for over 7,577 days (20 years, 8 months and 29 days). CBN should therefore enforce the Estate Account to be credited not only with ¦ 73.5m but with accrued interest (over ¦ 57.5m) computed at 27% MPR from January 2023 till date in line with Monetary Policy Guidelines within a specified timeline failing which the Apex Bank by-pass the Bank and credit the Customer via CSCS.

CBN to compel Signature Bank to credit the defrauded account with ¦ 30.9m together with accrued interest using MPR from April 30, 2025 till date failing which the Apex Bank credit the account via CSCS.

Necessary steps should be concluded between CBN & GTB for the refund of Unclaimed Balance of $183.50 plus accrued interest without further delay.

The CBN has demonstrated capability in resolving many complaints and curbing some fraud trends. To build on this, it must shift from reactive mediation to proactive deterrent enforcement. Nigerian customers – individuals, businesses and estates – deserve swift justice, not prolonged silence. Expeditious, firm action will not only deliver redress in pending cases but also signal zero tolerance for negligence ultimately strengthening trust and inclusion in the financial system.

The time for kid gloves is over. Robust regulations protect everyone: customers, honest banks and the economy at large. 

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