Right of Customers: Tribunal Convicts Stanbic-IBTC Bank Over Infractions

Right of Customers

OpenLife Nigeria reports that Stanbic-IBTC Bank , a commercial banking company, with a committed philosophy to driving Africa’s growth , has been fined by The Competition and Consumer Protection Tribunal,CCPT.
The court, on Thursday, imposed a fine of N120 million against Stanbic-IBTC Bank over the bank’s failure to complete a transfer request for a customer.
In a split decision of two to one, the tribunal convicted the bank for contravening the provisions of Section 130(1)(a) of the FCCP Act, 2018 and Section 5(2)(8) and (9) of the Central Bank of Nigeria Regulation on Instant Interbank Electronic Transfers.
The tribunal said the fine was imposed due to the bank’s failure to comply with the 10 minutes or at most one-hour mandatory timeline for failed transfers to be reversed as provided by Sections 154 and 155 of the FCCP Act, 2018.

The lead judgment delivered by Hon. Sola Salako-Ajulo also ordered the bank to pay the claimant, Mr Clement Osuya, the sum of N1 million as cost of filing the action.
“The tribunal holds that in as much as the defendant (IBTC) failed to comply with the two instructions of the claimant to transfer the sums of N500,000 to another account in Access Bank, as no transfer took place at both times, defines that the defendant breached the banker-customer contractual relationship between the two parties,” Ajulo said.
The tribunal, however, refused to award the sum of N5 million to Osuya as compensation on the grounds that he failed to prove any injury he suffered as a result of the failure of service delivery by the bank.
Hon. Ibrahim Yakubu concurred with the verdict of Salako-Ajulo while the presiding judge, Hon. Chuma Mbonu disagreed and gave a minority judgment.
Mbonu in his minority judgment held that the tribunal lacked the jurisdiction to entertain the petition.
According to him, the tribunal has the powers of appellate jurisdiction and not of original jurisdiction and he consequently struck the suit out for lacking in merit.
It could be reported that Osuya had filed a petition against the bank challenging the failure of the bank on two occasions to transfer the sum of N500,000 from his IBTC account to his Access bank account.
He claimed that the money was for the payment of school fees for his children.
He told the tribunal that on Sept. 8, 2022, he filled out a form under NIS Instant Payment option for a transfer of the sum of N500,000 to his Access Bank account.
He held that whereas the money, on both occasions left his IBTC account as the account was debited, it never arrived his Access bank account because it was not credited.
Osuya told the tribunal that the reversal on the first transaction was done after 24 hours while that of the second transaction was reversed after 72 hours.
He further alleged that this neglect of duty of care by the bank caused him trauma, embarrassment and a dent in his reputation as he was forced to collect a loan.
The bank, through its counsel, Mr Marcel Osigbemhe had blamed the failure of the transaction on the third-party NIPS service.
Osigbemhe, in a brief remark, expressed his displeasure over the judgment, saying he wondered how his client could be convicted when there were clearly no charges brought against it.
Counsel to the claimant, Ms. Deborah Solomon, for her part thanked the Tribunal for the well-considered judgment.
The fine is to be paid into the tribunal’s remitta account.
In a similar circumstance, the bank, only recently was in court to defend complaints against one of its staff alleged to have fraudulently converted the sum of N250 Million to his personal use .
In the case which came up at a Federal High Court sitting in Lagos, South West, Nigeria, Ajayi Olusola a staff of Stanbic IBTC bank was arraigned before the court based on a petition written and jointly signed on behalf of Stanbic IBTC Bank by Kayode Agbetoye Manager, investigations and Fraud Risk and Rekia Eletu Head, Investigations and Fraud Risk, the petition titled “Alleged Diversion of Approved Written -off Amounts for Bad Loans by Olusola Ajayi Others, Sola David-Borha, Stanbic IBTC Chairman.
The petition was written and address to the Commissioner of Police Special Fraud Unit 13b,Milverton Avenue Ikoyi Lagos.Nigeria.

Stanbic IBTC Bank PLC in the said petition stated thus:
We are currently investigating a case of alleged diversion of approved Written-off Loan by some staff members and others. The amount to be written-off, as approved by the Board,were expected to be posted into loan accounts of the beneficiary debtors, to nil off the outstanding loans as provisioned. It was however discovered that the written off amounts were diverted and credited into personal and corporate accounts where the funds were utilized by the account owners.
Our preliminary findings revealed that on 21 April 2021, the Bank’s Board approved to write off total amount of N37,628,329.00 on 28 defaulting customers’ accounts. The request was to write off the outstanding exposures (as well as the debit interest that would have accrued before the actual entries are passed). Also, the Board’s approval was obtained on 21 April 2021 to write -off total amount of N2,462,057,201.71 on 848 defaulting customers’ accounts.
Some of the amounts approved for write off into the loan accounts of the defaulting customers were discovered to have been diverted and credited into a Corporate Account, Able System Services Nigeria Ltd. (ASSNL), a customer of the bank.
A review of the transfers from ASSNL’s account showed that 36 beneficiaries in other banks received total amount of N55,118,002 between 2015 and 2021. Three (3) of these recipients are customers of Stanbic IBTC bank – Ajayi Olusola (staff), Ayodele Omoniyi Olaogun and Hakeem Abdulliadi. Olusola Ajayi received total amount of N12.5Million into his Bank account from between November 2020 and May 2021. Also, Ayodele Omoniyi Olaogun received total amount of N9.74million to his Access Bank account from ASSNL between September2015 and May 2021.
Ajayi Olusola is an employee of the bank. He was a staff member of MIS Unit and currently a Business Support & Resolution (BS&R) team in the bank member was a staff in the member Bank. Ayodele Omoniyi Olaogun is ex-staff and currently Olaogun is an ex-staff of the bank He was a staff of the bank. He was a staff member of the MIS Unit.
We therefore request that you use your good office to conduct a detailed investigation into this incident and effect the arrest of the suspect(s) for prosecution.
We count on your usual cooperation