TAJ Bank is grappling with a major financial and leadership crisis following a devastating system failure in March 2025 that led to the unauthorized diversion of N957.4 million into various accounts across 26 banks and fintech platforms.
Newsonspot reports that this incident, reminiscent of a similar but less severe glitch in 2024 involving N139.6 million, has reignited serious concerns about the bank’s cybersecurity architecture and internal safeguards.
Despite swift legal action, TAJ Bank’s efforts to recover the stolen funds hit a brick wall in April when the Federal High Court in Abuja denied its petition for interim freezing orders and post-no-debit directives. The court’s refusal significantly diminished the bank’s chances of reclaiming the lost funds through judicial means.
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In a further blow, the Central Bank of Nigeria (CBN) fined TAJ Bank N200 million in May 2025, citing “material cybersecurity deficiencies” and non-compliance with its Risk-Based Cybersecurity Framework. This regulatory penalty only deepened the institution’s troubles.
Amid growing scrutiny, the bank’s Managing Director and CEO, Hamid Joda, abruptly resigned in June, officially attributing his departure to “personal reasons.” However, insider reports suggest his exit was triggered by the mounting fallout from the security breach and CBN sanctions.
In an unexpected move, the bank withdrew its lawsuit on July 21, 2025. Instead, it chose to rely on the provisions of the CBN’s 2017 Regulatory Framework for BVN Operations and Watchlist. TAJ Bank claims this regulation enables receiving institutions to freeze and return the diverted funds without a court order.
However, the bank has yet to issue a full public statement addressing the scandal. Its minimal communication and reliance on regulatory backchannels have raised eyebrows. Analysts say the bank’s strategy may be doing more harm than good.
“TAJ Bank’s withdrawal of the lawsuit, coupled with the CBN fine and CEO’s resignation, suggests a bank in crisis management mode – not in control,” said Kemi Adebola, a Lagos-based banking analyst. “Relying on goodwill rather than a court-backed recovery plan for nearly a billion Naira is highly risky. Customers are now left to question if their funds are truly secure.”
The alarm bells had already been ringing before this breach. TAJ Bank’s 2024 audited financials revealed a 40% decline in profit after tax, a warning sign of deepening operational stress.
With investor confidence shaken and customer trust under threat, TAJ Bank faces a critical moment in its short but once-promising journey. Restoring credibility and demonstrating control over its systems may determine the bank’s survival in Nigeria’s fiercely competitive financial sector.
