A bank account is maintained on the basis that the bank will keep an accurate record of the customer’s funds and will only debit the account in accordance with the customer’s instructions, the terms governing the account, or a lawful authority. Where a bank wrongfully deducts money from a customer’s account, the customer is entitled to challenge the deduction and seek recovery of the money. A wrongful deduction can arise from an unauthorised transaction, an erroneous debit, excessive or unauthorised bank charges, a duplicate debit, a failed transaction that was nevertheless debited, or an error in the bank’s calculation of the customer’s indebtedness. The Central Bank of Nigeria’s Consumer Protection Framework expressly recognises unauthorised or erroneous debits, excess charges and financial loss resulting from staff negligence or fraudulent activities as categories of complaints that banks’ customer-compensation policies should address. This article explains what to do when a bank wrongfully deducts money from your account and the legal remedies available for recovering the money. What Is a Wrongful Bank Deduction? A wrongful bank deduction occurs where a bank debits a customer’s account without a valid basis. Examples include: A debit that the customer did not authorise. A bank charge that was not permitted. A duplicate debit for the same transaction. A failed ATM transaction where the account was debited but cash was not dispensed. A POS or electronic transaction that was reversed by the merchant but not credited back to the customer. A bank debiting the wrong amount. A bank deducting money based on an erroneous calculation. An unauthorised transfer from the customer’s account. Excessive or unlawful charges. A debit made after the customer has already settled the relevant obligation. The precise legal position depends on the circumstances of the deduction. Can a Bank Debit Your Account Without Your Permission? A bank cannot simply debit a customer’s account whenever it wishes. There are, however, circumstances in which a bank can debit an account without obtaining a fresh instruction from the customer. These include legitimate charges authorised by the applicable terms and conditions, statutory deductions, repayment of obligations where the bank has a valid contractual right of set-off, and other deductions authorised by law or the account agreement. The important question is therefore not merely whether the customer gave a specific instruction immediately before the debit. The question is whether the bank had a lawful or contractual basis for making the debit. Where there is no such basis, the customer can challenge the debit. What Are Common Examples of Wrongful Bank Deductions? Unauthorised Electronic Transfer Money can be transferred from an account through internet banking, mobile banking, USSD or another electronic channel without the customer’s authority. Where the customer did not authorise the transaction, the customer should immediately notify the bank and request investigation and reversal. Failed ATM Transaction An ATM transaction can fail while the customer’s account is nevertheless debited. For example, a customer attempts to withdraw ₦100,000, the ATM does not dispense the money, but the account statement shows a ₦100,000 debit. The customer should report the transaction immediately and request reversal. Wrongful Bank Charges A bank can also wrongfully deduct money by imposing charges that are not authorised or exceed the applicable limits. The CBN’s Guide to Charges sets out charges applicable to banking services and provides sanctions where a financial institution wrongfully imposes a particular charge on a customer. Duplicate Debit A customer can sometimes be charged twice for one transaction. Where only one transaction occurred but two debits appear on the account, the customer should notify the bank and request correction of the account. Erroneous Debit A bank can make an accounting or calculation error and debit the customer’s account with an amount that is not actually owed. Nigerian appellate decisions recognise that a bank’s wrongful debit can constitute a breach of the bank’s obligations to its customer. In Union Bank of Nigeria Plc v. E.D. Emole, the court considered a situation where the bank wrongly debited the customer’s account as a result of an error and treated the wrongful debit as a breach of the bank’s duty to maintain a proper and accurate account. What Should You Do When a Bank Wrongfully Deducts Money? The customer should act promptly. 1. Obtain Your Bank Statement First obtain a statement or transaction history showing the disputed debit. Identify: The date of the debit. The amount. The transaction description. The transaction reference. The account into which the money was transferred, where available. Any applicable bank charges. Do not simply tell the bank that “money was removed.” Identify the specific transaction. This is important because a customer bringing a legal claim must be able to identify and prove the particular debit being challenged. In Alhaji Aminu Hamisu Usman v. First Bank of Nigeria Plc, the Court of Appeal criticised a party who merely tendered a statement of account containing numerous alleged unauthorised charges without identifying the specific entries and explaining why they were unauthorised. 2. Report the Debit to the Bank Immediately Contact the bank through its official complaint channels. Where the transaction is unauthorised, report it as soon as possible. The complaint should identify the disputed transaction and clearly state that you did not authorise it, where that is the case. 3. Make the Complaint in Writing Do not rely solely on a telephone conversation. Submit a written complaint through the bank’s official complaint channel and retain evidence that it was submitted. The CBN advises customers to submit written complaints to their banks and obtain an acknowledgement for their records. 4. Request Reversal Clearly state what you want the bank to do. For example: I request the immediate reversal and re-crediting of the sum of ₦500,000 wrongfully debited from my account on 20 August 2026. Where appropriate, request that the bank provide the result of its investigation in writing. 5. Preserve the Evidence Keep: Bank statements. SMS alerts. Email alerts. Transaction receipts. ATM slips. POS receipts. Screenshots. Complaint reference numbers. Emails to the bank. The bank’s responses. Relevant
Can a Bank Freeze a Joint Account in Nigeria?
A joint bank account is an account operated in the names of two or more persons. Joint accounts are commonly used by spouses, business partners, family members and other persons who wish to operate an account together. A common question is whether a bank can freeze a joint account because of a problem involving only one of the account holders. Yes, a bank can place a restriction on a joint account in appropriate circumstances. However, the fact that one joint account holder has a dispute, debt or legal problem does not automatically give the bank an unrestricted right to freeze the entire account. The legality of the restriction depends on the reason for the freeze, the account mandate, the bank’s contractual terms, any applicable regulatory or statutory authority and, where relevant, the existence and scope of a court order. Nigerian case law also establishes that a bank owes its customers contractual duties and must exercise reasonable care and skill in operating their accounts. In Bernard & Anor v. FCMB Ltd (2022) LCN/16024(CA), the Court of Appeal considered a restriction placed on a business savings joint account and affirmed that an unjustified restriction can constitute a breach of the banker-customer relationship. What Is a Joint Bank Account? A joint account is an account opened in the names of two or more persons. The manner in which the account can be operated is determined by the account mandate. For example, a joint account can be structured so that: either account holder can give instructions independently; all account holders must sign before a transaction can be carried out; or a specified number of the account holders must authorise a transaction. The Central Bank of Nigeria’s account-opening framework recognises joint accounts and provides for an account mandate specifying the authority by which the account is to be operated. The particular mandate governing the account is therefore important when determining the rights of the joint account holders. Can a Bank Freeze a Joint Account? Yes. A bank can restrict a joint account where there is a lawful basis for doing so. For example, a restriction can arise where: there is a valid court order; the bank is required to comply with a lawful regulatory or statutory requirement; there is a legitimate dispute concerning the ownership or operation of the funds; the account is connected with a suspected fraudulent transaction; the bank is acting pursuant to a valid contractual right; or circumstances surrounding the account require the bank to suspend transactions pending clarification. The bank’s terms and conditions can also be relevant. For example, Zenith Bank’s published account-opening terms provide for the bank to place a hold on an account where there is a dispute concerning funds or another person claims an interest in the funds. However, the existence of a joint account does not give the bank an unlimited power to freeze it whenever one of the account holders has a personal problem. Can a Bank Freeze the Entire Joint Account Because of One Account Holder? It depends on the circumstances. This is the more important question. Where the reason for the restriction relates specifically to one account holder, the bank should have a proper basis for determining the extent of the restriction. For example, suppose A and B maintain a joint account containing ₦10 million. A becomes the subject of a legal dispute concerning ₦2 million belonging to A personally. The fact that A is a joint account holder does not automatically establish that all ₦10 million in the joint account belongs to A or that the entire account should be permanently frozen. The bank must consider the nature of the claim, the account mandate, the source and ownership of the funds where relevant, and the terms of any court order or other legal authority relied upon. What If One Joint Account Holder Owes Money to a Creditor? A personal debt owed by one joint account holder does not automatically mean that the creditor is entitled to all the money in the joint account. Where the creditor has obtained a judgment against one account holder, the appropriate judgment-enforcement procedure must be followed. A creditor cannot simply instruct a bank to take the money of the other joint account holder merely because the debtor happens to be a joint account holder. Where a court order is involved, the precise terms and scope of that order become critical. The non-debtor joint account holder should therefore obtain legal advice immediately if a joint account has been restricted because of the other holder’s personal debt. Can a Bank Freeze a Joint Account Because of a Court Order? Yes. Where a valid court order directs a bank to restrict or preserve funds in a joint account, the bank is required to comply with the order within its terms. However, the court order should be examined carefully. The important questions include: Which account is affected? Which account holder is the subject of the proceedings? What amount is affected? Does the order apply to the entire account? Does it restrict withdrawals or completely freeze the account? How long is the order intended to operate? Was the order made by a court with jurisdiction? A bank should not treat an order concerning one person as automatically authorising restrictions beyond the terms of the order. Can the Police Cause a Joint Account to Be Frozen? A police investigation can result in a bank account being restricted, but the bank’s legal authority to impose the restriction must still be considered. This issue arose in Bernard & Anor v. FCMB Ltd. The appellants operated a business savings joint account with FCMB. They complained that the account had been frozen following a Nigerian Police Force instruction. FCMB maintained that it had acted pursuant to a Post No Debit order from a Magistrate Court. The Court of Appeal ultimately dealt with the question of damages and affirmed the lower court’s refusal to award punitive or exemplary damages. Importantly, however, the judgment discussed the contractual banker-customer relationship
Can an Employer Withhold Salary in Nigeria?
An employee’s salary is a fundamental part of the employment relationship. Once an employee has earned salary under the terms of the employment contract, an employer cannot simply withhold it without a lawful basis. Salary can only be withheld or deducted in certain circumstances permitted by law or by the terms of the employment relationship. However, an employer that arbitrarily refuses to pay an employee’s earned salary can be liable to the employee for the outstanding amount. This article explains when an employer can lawfully withhold or deduct salary in Nigeria, what an employee can do when salary is withheld, and the legal remedies available for recovering unpaid salary. What Does It Mean to Withhold Salary? Withholding salary means failing to pay an employee remuneration that has become due and payable. It is different from a lawful deduction. For example, where an employee’s gross salary is ₦500,000 and the employer deducts an amount required by law, the employer has not necessarily withheld the employee’s salary unlawfully. However, where the employer simply refuses to pay the employee’s ₦500,000 salary without a lawful basis, the situation is different. The reason for the non-payment is therefore important. Can an Employer Withhold Salary in Nigeria? An employer cannot arbitrarily withhold salary that an employee has earned. The legality of withholding or deducting salary depends on the employment contract, applicable legislation and the circumstances of the particular case. The Labour Act contains provisions regulating deductions from wages, while the terms of the employment contract can also establish the employee’s remuneration and circumstances in which deductions can be made. An employer should therefore have a lawful basis before withholding or deducting an employee’s salary. When Can an Employer Lawfully Deduct Money from Salary? There are circumstances in which deductions from salary are lawful. Statutory Deductions Certain deductions are required by law. These can include applicable taxes and other statutory contributions or deductions imposed under Nigerian law. An employer making a statutory deduction is not unlawfully withholding the employee’s salary merely because the employee receives a lower net amount than the gross salary. Contractually Authorised Deductions An employment contract can contain provisions authorising particular deductions in specified circumstances. However, the existence of a contractual provision does not automatically make every deduction lawful. The employer must still comply with applicable legislation and the terms of the contract. Deductions Permitted by Law The law permits certain deductions in specified circumstances. Section 5 of the Labour Act regulates deductions from wages and places restrictions on deductions that an employer can make from an employee’s remuneration. An employer should therefore identify the specific legal or contractual basis for any deduction from salary. Can an Employer Withhold Salary Because an Employee Made a Mistake? Not automatically. An employee’s mistake does not give an employer an unrestricted right to deduct the cost of the mistake from the employee’s salary. The employer must establish the legal or contractual basis for the deduction. For example, if an employee causes financial loss to the employer through negligence, the employer should not simply decide the amount of the loss and deduct it from the employee’s salary without considering the applicable employment terms and law. Where the employer believes that the employee is financially liable, the employer should use the appropriate disciplinary or legal procedure. Can an Employer Withhold Salary Because an Employee Owes the Company Money? An employer cannot simply treat an alleged debt owed by an employee as permission to withhold whatever amount of salary it chooses. The alleged debt should be established, and any deduction from salary must comply with applicable law and the employment contract. If the employer has a genuine claim against an employee, it can pursue the appropriate contractual or legal remedy. The existence of an alleged debt and the employee’s entitlement to earned salary are separate issues. Can an Employer Withhold Salary Because an Employee Resigns Without Notice? An employee who resigns without giving the required notice can potentially be liable for the consequences of failing to comply with the employment contract. However, this does not automatically give the employer an unrestricted right to confiscate or withhold all salary owed to the employee. The employer should determine the employee’s contractual liability and the lawful means of enforcing it. An employer should also distinguish between: salary already earned; salary payable during a notice period; payment in lieu of notice; and any separate debt allegedly owed by the employee. These are not automatically the same thing. Can an Employer Withhold Salary During an Investigation? An employer may need to investigate allegations of misconduct, but the existence of an investigation does not automatically entitle the employer to withhold salary indefinitely. The employer should examine the employment contract, staff handbook, disciplinary policy and applicable law to determine the employee’s position during the investigation. If the employee has been suspended, the terms governing suspension become particularly important. The employer should not use an investigation as a blanket justification for withholding earned salary where there is no lawful basis for doing so. Can an Employer Suspend an Employee Without Salary? The answer depends on the terms of the employment relationship and the circumstances of the suspension. An employer should examine the employment contract, applicable workplace policies and relevant law before placing an employee on suspension without pay. Where the contract expressly permits suspension without pay in specified circumstances, that provision becomes relevant. Where there is no contractual or legal basis for withholding remuneration during suspension, the employer can face a claim from the employee. The mere use of the word “suspension” does not automatically determine whether salary is payable. Can an Employer Withhold Salary Because of Poor Performance? Poor performance does not automatically entitle an employer to withhold an employee’s earned salary. Performance management and salary payment are separate issues. Where an employee has performed work for the relevant period and earned the agreed salary, the employer should not simply withhold the salary because the employee did not meet a performance target unless there is a
How to Recover Unpaid Salary from an Employer in Nigeria
Salary is a fundamental entitlement arising from an employment relationship. Where an employer fails to pay an employee’s salary when it falls due, the employee is entitled to take steps to recover the outstanding amount. An employer’s failure to pay salary does not automatically extinguish the employee’s entitlement to that salary. The appropriate remedy depends on the terms of the employment contract, the applicable law, the reason for the non-payment and the nature of the employment relationship. An employee who is owed salary should first establish the amount outstanding, review the terms of employment and make a formal demand. Where the employer refuses to pay, the employee can pursue the appropriate legal remedy. What Is Unpaid Salary? Unpaid salary is remuneration that an employee has earned under an employment relationship but which the employer has failed to pay when due. It can arise where an employer: Fails to pay an employee’s monthly salary. Pays only part of the agreed salary. Withholds salary without lawful justification. Fails to pay salary for the final period of employment. Fails to pay other contractual remuneration that has become due. Continues to withhold salary after terminating the employee’s employment. The precise entitlement depends on the employment contract and applicable law. Is an Employer Legally Obliged to Pay Salary? Yes. Where an employee has performed work pursuant to an employment contract, the employer is generally required to pay the agreed remuneration in accordance with the terms of the employment relationship. The employment contract is therefore an important document in any dispute over unpaid salary. The employee should examine the contract to determine: The agreed salary. The payment date or payment cycle. Allowances and other contractual benefits. Conditions attached to any bonus or incentive. The circumstances in which deductions can be made. The procedure for termination. Any applicable disciplinary or grievance procedure. Can an Employer Refuse to Pay Salary Because the Business Is Experiencing Financial Problems? An employer’s financial difficulty does not automatically extinguish an employee’s contractual entitlement to earned salary. A company experiencing financial difficulties can take lawful measures to restructure its workforce or business, but it cannot simply assume that employees have surrendered their entitlement to salary already earned. If the employer cannot pay, the parties can agree on a lawful arrangement concerning outstanding remuneration. An employer should not, however, treat an employee’s earned salary as automatically forfeited because the business is experiencing financial difficulties. Can an Employer Withhold an Employee’s Salary? An employer cannot make arbitrary deductions from an employee’s salary. The legality of withholding or deducting salary depends on the circumstances, the employment contract and applicable legislation. Where an employer has a legitimate basis for a deduction, that basis should be identifiable and supported by the applicable law or contractual terms. An employee who discovers that salary has been withheld should therefore ask the employer to state the reason for the withholding and the legal or contractual basis relied upon. What Should an Employee Do When an Employer Refuses to Pay Salary? An employee should not immediately commence litigation without first establishing the facts and creating a documentary record. 1. Review the Employment Contract The first step is to review the employment contract or letter of appointment. Confirm the agreed salary, payment schedule and any provisions concerning deductions, suspension, leave, disciplinary action and termination. 2. Calculate the Amount Owed Determine precisely how much the employer owes. For example, if an employee’s monthly salary is ₦500,000 and the employer has failed to pay for three months, the basic salary arrears are ₦1,500,000, subject to any lawful deductions or other relevant contractual provisions. The employee should also separately identify unpaid allowances, commissions, bonuses or other benefits where they are contractually due. 3. Make a Formal Demand The employee should formally demand payment from the employer. The demand should state: The period for which salary remains unpaid. The amount outstanding. The contractual basis for the entitlement. The date by which payment is expected. The consequences of failing to resolve the matter. A written demand creates evidence that the employer was informed of the outstanding obligation. 4. Preserve Evidence An employee should preserve documents relating to the employment and non-payment. These can include: Employment contract. Letter of appointment. Payslips. Bank statements. Emails. WhatsApp messages. Staff handbook. Salary schedules. Evidence of previous salary payments. Correspondence with the employer. Termination or resignation documents. These documents can become important evidence if the dispute proceeds to litigation. Can an Employee Recover Unpaid Salary After Resigning? Yes. Resigning from employment does not ordinarily mean that an employee has abandoned salary that was already earned. If an employee resigns while the employer owes salary that had already become due, the employee can pursue recovery of the outstanding amount. The employee should distinguish between salary already earned and future salary that would have been earned had the employment continued. The fact that the employee resigned does not by itself extinguish an existing entitlement to salary already earned. Can an Employee Recover Unpaid Salary After Being Terminated? Yes. Termination of employment does not automatically extinguish salary that had already accrued before termination. For example, if an employee’s employment ends on 15 August and the employee has not received the salary due for the preceding month, the termination does not eliminate the existing salary debt. The employee can pursue the outstanding salary together with any other contractual entitlements that have become due. Where the termination itself was wrongful, the employee can also pursue the remedies available for wrongful termination, subject to the nature of the employment. Can an Employer Refuse to Pay Salary Because an Employee Owes the Company Money? An employer should not simply deduct whatever amount it considers appropriate from an employee’s salary. Whether a particular deduction is lawful depends on the applicable law, the employment contract and the circumstances giving rise to the alleged debt. Where an employer alleges that an employee owes the company money, the employer should establish the basis of the debt and the lawful mechanism for recovering it.
PND Meaning in Banking in Nigeria: What Does Post No Debit Mean?
PND means Post-No-Debit. In banking, a PND is a restriction that prevents debit transactions from being made from an account. If your bank has marked your account for no debit, the reason for the restriction matters because PNDs can arise from different legal, regulatory, contractual or investigative circumstances. A Post-No-Debit, commonly abbreviated as PND, is a restriction that prevents debit transactions from being carried out on a bank account. Depending on the circumstances, the restriction can prevent the customer from withdrawing, transferring or otherwise dealing with funds in the account. However, PND does not always have the same legal basis. A bank may place a restriction pursuant to applicable regulatory requirements or contractual terms, while in other circumstances a PND may arise from a court order or a directive from a law-enforcement agency. The legal basis for the particular PND therefore matters. What Does Post-No-Debit Mean? A Post-No-Debit instruction means, in simple terms, that debit transactions cannot be made from the affected account while the restriction remains in force. For example, a customer whose account is under PND may be unable to: Withdraw cash. Transfer money to another account. Make certain electronic payments. Issue cheques that would debit the account. Use the account for other transactions that require a debit. The restriction does not necessarily mean that the account has been closed. It also does not necessarily mean that the bank has taken ownership of the money in the account. The account may remain open while transactions that would debit the account are restricted. What Is the Difference Between PND and Freezing a Bank Account? The terms are sometimes used interchangeably, but they do not necessarily describe exactly the same thing. A Post-No-Debit (PND) specifically refers to a restriction on debit transactions. A freeze is a broader expression that can describe a restriction preventing a customer from accessing or dealing with funds in an account. The practical effect depends on the particular restriction imposed. For example, a PND may prevent withdrawals and transfers while the account continues to receive credits. In other circumstances, a restriction may prevent both debit and credit transactions. The bank should therefore be asked to state precisely what restriction has been placed on the account. Can a Bank Place a PND on Your Account Without a Court Order? There is no blanket answer to this question. The answer depends on the legal basis for the PND. The Court of Appeal in Kuda Microfinance Bank Ltd v. Amarachi Kenneth Blessing (2024) LPELR-80643(CA) recognised that a bank could, in appropriate circumstances involving suspected fraud or suspicious activity, restrict a customer’s account without first obtaining a court order where the bank’s contractual terms and applicable regulatory framework supported the restriction. However, other Court decisions have emphasised the requirement for judicial authority where a bank is relying on a law-enforcement directive as the basis for restricting a customer’s account. For example, in FBN Plc & Anor v. DKN Investment Ltd & Anor (2025) LPELR-80878(CA), the Court of Appeal considered a restriction based on a law-enforcement directive and held, in the circumstances of that case, that the bank could not rely on the directive to restrict the account without the necessary court order. Therefore, it is incorrect to state categorically that every PND requires a court order. It is equally incorrect to state that a bank can place a PND whenever it wants without judicial authority. The reason for the PND must first be established. Who Can Place a PND on a Bank Account? A PND can arise from different sources, depending on the circumstances. 1. The Bank A bank can impose an account restriction where it has a valid contractual, regulatory or other lawful basis for doing so. For example, the Court in Kuda MFB v. Amarachi Kenneth Blessing upheld a bank’s restriction of an account in circumstances involving an allegedly erroneous transfer and suspected fraudulent activity. 2. A Court A court with the requisite jurisdiction can make an order restricting a customer’s account. The bank then implements the order in accordance with its terms. In First City Monument Bank v. Dr. Nelson Ogbemudia & Anor (2022) LPELR-58859(CA), the Court of Appeal described a PND order as a directive restricting a bank customer from withdrawing funds and discussed the role of the court in making such orders. 3. A Law-Enforcement Agency Certain law-enforcement agencies have statutory powers concerning account restrictions, but the precise scope of those powers depends on the legislation establishing the agency and the circumstances in which the restriction is imposed. This is an area where the applicable statute and current case law must be examined carefully. Why Is My Account Marked for No Debit (PND)? If your bank account is marked for no debit, it means the bank has placed a Post-No-Debit (PND) restriction on the account. The restriction generally prevents you from making debit transactions, such as withdrawals, transfers, payments or other transactions that would reduce the available balance. A bank may place a PND on an account for several reasons, depending on the circumstances. Common reasons include: 1. Suspected Fraud or Unauthorised Transactions A bank may place a PND where there is a complaint or indication that funds credited to an account may be connected with fraud, an unauthorised transaction or another suspicious transaction. The restriction may be used to prevent further movement of the funds while the bank investigates the complaint or obtains clarification from the relevant parties. 2. A Dispute Over Money Paid Into the Account If another person or institution alleges that money was wrongly transferred into your account, the bank may restrict the account while it investigates the circumstances surrounding the transaction. This does not, by itself, determine that you are liable for the disputed funds. The circumstances of the transaction and the applicable legal and regulatory requirements will be important. 3. Court Order or Legal Proceedings A PND may also arise from a court order or other lawful legal process restricting dealings with funds in an account. Where the