By Otunba (Dr.) Abdulfalil Abayomi Odunowo
What every Nigerian must know about banks’ legal duties, the limits of their fine print, and the right to challenge unauthorised transactions
Opening a bank account is not a favour. It is a contract. Money deposited becomes the bank’s property; the bank becomes the debtor and the customer the creditor. This principle, settled in Foley v Hill (1848), remains the foundation of banking law in Nigeria. The customer is not a grateful beneficiary of institutional goodwill. Both parties have enforceable obligations.
A correct PIN is not conclusive proof of consent
A trader whose ordinary transfers range from ₦50,000 to ₦300,000 suddenly sees three transfers totalling ₦5 million leave her account in minutes. She denies authorising them. The bank replies that the correct PIN or token was used.
That answer is incomplete. Electronic authentication is evidence, not automatic proof of genuine consent. Credentials can be compromised by phishing, malware, SIM swaps or social engineering. Liability turns on facts: Was the transaction truly authorised? Were the bank’s systems reasonably secure? Did either party act negligently? Did the bank investigate properly once alerted?
Section 37(3) of the Cybercrimes (Prohibition, Prevention, etc.) Act 2015 is clear: a financial institution that makes an unauthorised debit must, upon written notification, either produce clear legal authorisation or reverse the debit within 72 hours. Failure is an offence carrying restitution and a fine.
A bank that treats a correct PIN as the end of the inquiry fails both its contractual duty of care and its statutory duty.
The small print has limits
Customers routinely accept lengthy terms without reading them. Those terms matter, but they do not override statute or regulation. A clause cannot excuse negligence, regulatory breach or failure to exercise reasonable care. The Central Bank of Nigeria’s Consumer Protection Regulations require clear information, transparent charges and effective complaints handling. The CBN’s Guide to Charges sets the permissible framework for fees. Arbitrary or undisclosed deductions remain challengeable.
When things go wrong, follow the process
Document everything. Notify the bank immediately through official channels, preserve alerts and statements, and lodge a written complaint stating the transaction, amount, date and remedy sought.
CBN rules require the bank to acknowledge the complaint and resolve most matters within two weeks. If unresolved, escalate to the CBN Consumer Protection Department (cpd@cbn.gov.ng) with evidence that the bank was first approached. In 2025 alone, financial institutions refunded ₦19.12 billion and $329.3 million to customers after complaints, while the CBN imposed hundreds of millions in sanctions for delays.
Customers also have duties: protect credentials, report suspected compromise promptly, and avoid facilitating fraud. Accountability is two-way. It is not one-way institutional convenience.
Five practical reforms
1. Issue every new account holder a plain-language summary of principal rights and obligations.
2. Explain electronic-banking risks and liability rules in ordinary language, not only in dense legal documents.
3. Strengthen real-time fraud monitoring for unusual patterns and rapid escalation of losses.
4. Publish comparable data on complaint volumes, resolution times and outcomes.
5. Embed basic banking-contract education in financial-literacy programmes.
A market trader, pensioner, civil servant or business owner is entitled to the same contractual protections regardless of deposit size. Nigeria needs strong banks. Strength is measured not only by digital volume and balance-sheet size, but by the fairness with which institutions treat the people who entrust them with money.
A bank account is a contract. Both sides must honour it. When either fails, the law not internal convenience determines the consequences.
Otunba (Dr.) Abdulfalil Abayomi Odunowo writes on governance, institutional accountability, consumer protection and national development.
