Post No Debit (PND) is a restriction placed on a bank account by regulatory authorities or account owners themselves to prevent unauthorized access or misuse of funds in the account.

This restriction is necessary in situations where fraudulent activities are suspected or when legal action is being taken to recover bad debts. However, in recent times, the illegal and indiscriminate use of PND has become a common practice among banks in Nigeria.

This practice is done primarily to 'hold' customer funds and force them to pay up outstanding debts or other related charges. In this discuss, we will explore the negative effects of such illegal use of PND on Nigerian banking and the public at large.

Majority of the Nigerian banks do not follow the due process of law or satisfy the regal requirement before placing a post-no debit restriction on a customer’s bank account.

But what are the consequences for not following due process of law, and what remedies are available to a customer who was unjustly denied access to funds in his bank account due to an illegal post-no debit restriction?

Folake4u

But what are the negative impacts on the bank customer whose bank account was illegally placed on Post No Debit Restriction?

Firstly, the illegal use of PND can hinder business operations and cause a loss of confidence in Nigeria's banking sector. When banks hold customer funds illegally, customers are unable to carry out transactions necessary for their businesses. This can stall crucial operations and lead to financial losses, which can ultimately damage the economy and cause job losses. Furthermore, the illegal use of PND can cause a lack of trust in the banking sector, which is crucial for the growth and development of the nation's economy. If customers are not confident in the banking system, it can lead to a reduction in investment, both by individuals and businesses.

Secondly, the illegal use of PND can have serious consequences for customers who are innocently caught up in this practice. Customers who have their accounts placed on PND illegally are often locked out of their own funds and forced to pay extra expenses to resolve the issue. These consequences can be detrimental, especially for low-income earners who may not have access to enough funds to meet such additional charges.

The third negative effect of the illegal use of PND is that it can lead to bank fraud and corruption. This practice is often encouraged by corrupt bank officials who use it as leverage to gain personal financial benefits. Banks can end up manipulating customers' accounts' legal procedures to hold their funds illegally or charge hidden fees. Such illegal practices can lead to bank fraud, compromise the integrity of the banking system, and ruin the confidence of the public in financial institutions.

Fourthly, the illegal use of PND can lead to an abuse of power by regulatory authorities. Regulators often place PND restrictions on accounts to prevent illicit financial activities and prevent capital flight. However, when these restrictions are applied illegally, they can lead to a breach of customers' fundamental human rights and financial freedom. Regulators can also abuse the power placed on them by the law to stop legitimate transactions from being carried out, which can lead to the automatic loss of customers' trust.

What is the position of the Nigerian Courts on Post No Debit Restriction?


In the recent case of NPG FARMS (NIG) LTD v. ZENITH BANK PLC (2022) LPELR-57548(CA), the Court of Appeal was of the decision that a post no debit restriction that exceeds the legally allowed 72hrs without a court order extending same is illegal, ultra vires the provision of the law and more importantly, a fundamental breach of the customer's right.

But before you begin ask why the court go talk something like this, let's explore the facts that culminated in this case.

In this case, the Appellant, who was the Plaintiff/Applicant at the trial court, instituted an action against the Respondent at the trial Court via an originating motion alleging the violation of his right to enjoyment of its property as entrenched in Section 44 of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

The Appellant sought a declaration that the posting of the Post No Debit (PND) on the Applicant's account with the Respondent bank without any valid or subsisting Order of Court to that effect amounts to a violation of the Applicant's right to enjoyment of its property as entrenched in Section 44 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) and Article 14 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act LFN 2004 amongst other declaratory reliefs and orders as well as general damages.

The Appellant lost the case at the trial court. But he won at the court of Appeal, which vacated the judgment of the trial court, entered judgment in his favour, and awarded the sum of 5 million naira as general damages and 250k as cost of action against the bank for illegally placing a continuing post no debit restriction on the Appellant's bank account without due process of law.

Trash!!!... Read efcc act... Read CBN circular or regulations on that viz-a-vis BVN framework also read the Ts&Cs (in fine print) on the account opening form or Offer letter for loans, as the case maybe.

Don't dabble into matters you know nothing about.

nnatobryno:
Trash!!!... Read efcc act... Read CBN circular or regulations on that viz-a-vis BVN framework also read the Ts&Cs (in fine print) on the account opening form or Offer letter for loans, as the case maybe.

Don't dabble into matters you know nothing about.

Read the combined effect of Section 34 of the EFCC Act 2004, Section 6(5) (b) of the Money Laundering Prohibition Act 2011 and Section 7(2)(a)-(f) of the EFCC Act (Supra).

See also the decision of the courts in NPG FARMS (NIG) LTD v. ZENITH BANK PLC (2022) LPELR-57548(CA); OLAGUNJU v. EFCC (2019) LPELR-4846 (CA); EFCC v. GLOBAL FORMWORK (NIG.) LTD & ORS (2020) LPELR-51398 (CA) and GTB v. ADEDAMOLA (2019) 5 NWLR PART 1664 PAGE 30 AT 43 PARAGRAPHS E-F, respectively.

You might also wish to go a step further and juxtapose the aforesaid positions of the law with Section 44 of the Constitution of the Federal Republic of Nigeria (as amended).

And if not satisfied, you might cap it up with the express provisions of Article 14 of the African Charter on Human and Peoples' Rights, which aptly provides thus:

"The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws."

Let me know if you have more questions or wish to refer me to more materials that provide otherwise.

Shalom. I rise.

dalitigator:



Read the combined effect of Section 34 of the EFCC Act 2004, Section 6(5) (b) of the Money Laundering Prohibition Act 2011 and Section 7(2)(a)-(f) of the EFCC Act (Supra).

See also the decision of the courts in NPG FARMS (NIG) LTD v. ZENITH BANK PLC (2022) LPELR-57548(CA); OLAGUNJU v. EFCC (2019) LPELR-4846 (CA); EFCC v. GLOBAL FORMWORK (NIG.) LTD & ORS (2020) LPELR-51398 (CA) and GTB v. ADEDAMOLA (2019) 5 NWLR PART 1664 PAGE 30 AT 43 PARAGRAPHS E-F, respectively.

You might also wish to go a step further and juxtapose the aforesaid positions of the law with Section 44 of the Constitution of the Federal Republic of Nigeria (as amended).

And if not satisfied, you might cap it up with the express provisions of Article 14 of the African Charter on Human and Peoples' Rights, which aptly provides thus:

"The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws."

Let me know if you have more questions or wish to refer me to more materials that provide otherwise.

Shalom. I rise.

Sounds like you just came out of law school and you want to start testing your knowledge on nairaland... Havent you heard that The Constitution of the FRN is supreme. Hence, any enactment stands as enacted. No Bank will randomly PND customers account. Have also asked your self this question, EFCC can and at will restrict an account for at least 72hours, if that directive is represented to the banks every 72hrs on other findings, what happens?

dalitigator:



Read the combined effect of Section 34 of the EFCC Act 2004, Section 6(5) (b) of the Money Laundering Prohibition Act 2011 and Section 7(2)(a)-(f) of the EFCC Act (Supra).

See also the decision of the courts in NPG FARMS (NIG) LTD v. ZENITH BANK PLC (2022) LPELR-57548(CA); OLAGUNJU v. EFCC (2019) LPELR-4846 (CA); EFCC v. GLOBAL FORMWORK (NIG.) LTD & ORS (2020) LPELR-51398 (CA) and GTB v. ADEDAMOLA (2019) 5 NWLR PART 1664 PAGE 30 AT 43 PARAGRAPHS E-F, respectively.

You might also wish to go a step further and juxtapose the aforesaid positions of the law with Section 44 of the Constitution of the Federal Republic of Nigeria (as amended).

And if not satisfied, you might cap it up with the express provisions of Article 14 of the African Charter on Human and Peoples' Rights, which aptly provides thus:

"The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws."

Let me know if you have more questions or wish to refer me to more materials that provide otherwise.

Shalom. I rise.

You have really not made any sense... Are you saying that banks/LEAs at will, randomly freeze citizens' account?

nnatobryno:


You have really not made any sense... Are you saying that banks/LEAs at will, randomly freeze citizens' account?

When you are tired, you will keep quiet. Go back and check my deactivated account @ litigator.

I know what I am saying, and I sued banks and Finance houses for this sin, and these cases are presently in court. Why are you acting like a child whose candy was taken from him without reasonable cause?

What exactly is your problem?

I gave you a 2022 case against Zenith bank to further elucidate that issues like these happen on a daily basis. So what else do ou need mbok? I go stone you from here now.

Arrant nonsense.

dalitigator:


When you are tired, you will keep quiet. Go back and check my deactivated account @ litigator.

I know what I am saying, and I sued banks and Finance houses for this sin, and these cases are presently in court. Why are you acting like a child whose candy was taken from him without reasonable cause?

What exactly is your problem?

I gave you a 2022 case against Zenith bank to further elucidate that issues like these happen on a daily basis. So what else do ou need mbok? I go stone you from here now.

Arrant nonsense.

May be you were forced to deactivate your account for constantly verbosing rubish

Please I need your advice.
I sold a car to a customer, the only problem with the car was A/C blower which I fixed before the buyer took delivery of the car.
They traveled from Lagos to Asaba without any hassle but according to my customer (the buyer ) he said the car started overheating and they found out the water pump is bad . I agreed to pay for that. The following day he called that the transmission won’t engage. First I thought that they want to rip me off. After we argued about it , I agreed to fix everything for him. They sent me the bill. It was when I want to send them money I discovered I discovered my account has been placed on PND. I had to send money from another bank to my mechanic who’s in contact with my customer mechanic them who later sent them the money. I called my customer and ask why he took such step, he said I wasn’t picking up my calls when he was calling. I told him I already sent him message that I will call back after evening service. It’s 3 days now and I still don’t have access to my account and I’ve fixed customer car and case closed but my account is still in PND. I’m thinking of taking legal action. What do you advise?

smugmanuel:
Please I need your advice.
I sold a car to a customer, the only problem with the car was A/C blower which I fixed before the buyer took delivery of the car.
They traveled from Lagos to Asaba without any hassle but according to my customer (the buyer ) he said the car started overheating and they found out the water pump is bad . I agreed to pay for that. The following day he called that the transmission won’t engage. First I thought that they want to rip me off. After we argued about it , I agreed to fix everything for him. They sent me the bill. It was when I want to send them money I discovered I discovered my account has been placed on PND. I had to send money from another bank to my mechanic who’s in contact with my customer mechanic them who later sent them the money. I called my customer and ask why he took such step, he said I wasn’t picking up my calls when he was calling. I told him I already sent him message that I will call back after evening service. It’s 3 days now and I still don’t have access to my account and I’ve fixed customer car and case closed but my account is still in PND. I’m thinking of taking legal action. What do you advise?

My Whatsapp number is on my profile. Kindly send me a Whatsapp message. Just saw this now. Hence the late response.