Stanbic-IBTC Bank Fined N120 Million for Failure to Complete Customer Transfer Request

The Competition and Consumer Protection Tribunal (CCPT) has imposed a hefty fine of N120 million against Stanbic-IBTC Bank for its failure to fulfill a customer’s transfer request.

The decision, delivered yesterday in a split verdict of two to one, found the bank guilty of contravening key provisions of the FCCP Act, 2018 and the Central Bank of Nigeria Regulation on Instant Interbank Electronic Transfers.

The tribunal’s lead judgment, delivered by Hon. Sola Salako-Ajulo, emphasized that the fine was imposed due to the bank’s non-compliance with the mandatory timeline for failed transfers to be reversed.

Sections 154 and 155 of the FCCP Act, 2018 stipulate a maximum of 10 minutes or, at most, one hour for such reversals. The tribunal’s ruling confirmed that Stanbic-IBTC Bank had breached its contractual obligations with the customer, Mr. Clement Osuya, by failing to effect two separate transfer instructions totaling N500,000 to an Access Bank account.

In addition to the fine, the tribunal ordered Stanbic-IBTC Bank to pay Mr. Osuya N1 million as the cost of filing the action. However, the tribunal denied Osuya’s claim for N5 million in compensation, citing a lack of evidence to substantiate any injury suffered due to the bank’s service failure.

Hon. Ibrahim Yakubu concurred with the majority verdict, while the presiding judge, Hon. Chuma Mbonu, dissented, delivering a minority judgment that argued the tribunal lacked jurisdiction to entertain the petition.

Mbonu contended that the tribunal only possessed powers of appellate jurisdiction and not original jurisdiction, leading him to strike out the suit on grounds of lacking merit.

The petitioner, Mr. Clement Osuya, filed the petition after Stanbic-IBTC Bank failed to transfer the sum of N500,000 on two occasions, which he intended to use for his children’s school fees.

Osuya informed the tribunal that although the funds were debited from his IBTC account, they were never credited to his Access Bank account, causing him considerable distress and necessitating the taking of a loan.

In its defense, Stanbic-IBTC Bank’s counsel, Mr. Marcel Osigbemhe, attributed the transaction failures to the third-party NIPS service. Osigbemhe expressed dissatisfaction with the judgment, questioning how his client could be convicted when no charges had been formally brought against it.

The CCPT ruled that the fine must be paid into the tribunal’s remitta account. This landmark decision serves as a clear message to financial institutions to uphold their obligations to customers and ensure the timely completion of transactions, safeguarding the rights and interests of consumers across Nigeria.