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Telecommunications giant, MTN has reportedly taken 18 Nigerian banks to court over a ₦22.3 billion ($53.7 million) mobile money fraud.

Reports indicate that MTN is alleging in a suit dated May 30 that its mobile money Payment Service Bank, MoMo, has suffered a fraudulent loss from its partner banks.

An amount of $53.7 million is said to have been transferred in error to 8,000 accounts maintained by the 18 banks’ customers.

Techcabal reports that in the suit, Chief Executive Officer of MoMo PSB, Anthony Usoro Usoro, also claimed that the fraud was committed over a total of 700,000 transactions, over a one-month period. Upon realising the fraud on May 24, MoMo PSB reportedly shut down its service to prevent further liability.

“The transfers were due to the fact that the plaintiff suffered system exploitation which led to the said debits. There is no transaction between the plaintiff [MoMo PSB] and the recipient account holders that warranted the transfer of the funds to those accounts,” the report quoted the supporting affidavit.

The affected banks, listed as defendants in the suit, include Access Bank, Ecobank, Fidelity Bank, FirstBank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Polaris Bank, Providus Bank, Stanbic IBTC, Standard Chartered, Sterling Bank, SunTrust Bank, Union Bank, United Bank for Africa, Unity Bank, Wema Bank, and Zenith Bank.

MoMo PSB is now seeking a court’s order for a refund for the ₦22.3 billion ($53.7 million) it claims. “By virtue of the provisions of the CBN Regulation on Instant (Inter-Bank) Electronic Funds Transfer Services, made pursuant to sections 2(D), 33(1)6) And 47(2) of the CBN Act 2007 the plaintiff is entitled to a return of its money and the provision of the information which it requires from the defendants,” the suit read.

The development comes only 2 months after MTN gained approval from the Central Bank of Nigeria to run a payment service bank.

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