It has become increasingly common if not fashionable for bank customers in Nigeria to wake up to a Post No Debit (PND) restriction placed on their accounts by law enforcement agencies, particularly the Economic and Financial Crimes Commission (EFCC) and the Nigeria Police Force. In many instances, such restrictions are imposed merely on the suspicion that an account may have been involved in suspicious financial transactions.
At other times, they are deployed quite irritably as a strategic tool to compel the appearance of a suspect who is evading arrest, given that access to funds is often essential for daily living. Whether it is lawful for law enforcement agencies to freeze a suspect’s bank account in matters unrelated to financial crimes is a question that deserves separate consideration. For present purposes, the focus is on the legal framework governing the restriction of bank accounts by law enforcement agencies in Nigeria.
THE LEGAL FRAMEWORK
The procedure for lawfully restricting a customer’s bank account during the course of an investigation is provided under the Money Laundering (Prevention and Prohibition) Act, 2022 (the “Act”).
Section 7(6) of the Act empowers a unit of the Commission, or its authorised representatives, to place a “Stop Order” on an account for a period not exceeding 72 hours without first obtaining a court order.
Where the agency requires the restriction to remain in force beyond the initial 72-hour period, it must apply to a competent court before the expiration of the administrative Stop Order for an order authorising the continued restriction of the account.
Consequently, where the 72-hour period expires without the procurement of a valid court order extending the restriction, any continued freezing of the account becomes unlawful. In such circumstances, a bank that continues to restrict the customer’s account may be liable for breach of its fiduciary and contractual obligations to the customer. Furthermore, the continued restriction may constitute an infringement of the customer’s constitutional rights, including the right to fair hearing and the right to own and enjoy property.
DURATION OF COURT-ORDERED RESTRICTIONS
A court order placing an account on Post No Debit status does not ordinarily subsist indefinitely, particularly where such order was obtained ex parte. Being interim in nature, an ex parte order remains effective only for the period specified by the court and lapses upon the expiration of that period unless renewed or extended by a subsequent order.
Under the applicable procedural rules, ex parte orders are generally temporary and cannot remain in force indefinitely without judicial review. Therefore, where an ex parte freezing order has expired and has not been renewed, any continued restriction based on that order may become unlawful.
Banks do not possess an unfettered discretion to restrict customers’ accounts.
This principle was reaffirmed in Lugard v. Zenith Bank Plc (2025) LPELR-82603(CA), where the Court of Appeal emphasised that freezing a customer’s account without proper legal authority, a valid court order, or compliance with due process is legally indefensible.
Similarly, in FBN Plc v. DKN Investment Ltd & Anor, (2008 )LPELR 80878. the court underscored the principle that where the basis for a restriction ceases to exist, the restriction ought to be lifted. Accordingly, where an investigation does not culminate in criminal charges, or where the legal authority supporting the restriction has expired, the continued freezing of the account may be unlawful.
REMEDIES AVAILABLE TO A CUSTOMER FOR WRONGFUL ACCOUNT RESTRICTION
A customer whose account has been wrongfully restricted may pursue one or more of the following remedies:
- Application for the Discharge or Lifting of the Order
Where the restriction is based on a court order obtained ex parte, the customer may apply to the court that issued the order for its discharge, variation, or setting aside. This is typically done by way of a Motion on Notice. - Action for Damages
Where an account remains restricted after the expiration of the relevant administrative or judicial order, or where no valid order exists to support the restriction, the customer may institute an action for damages against the responsible parties.
Such unlawful restriction may constitute a breach of the bank’s contractual and fiduciary obligations to the customer, as well as an infringement of the customer’s constitutional and proprietary rights. Depending on the circumstances, the customer may be entitled to compensatory damages and other appropriate reliefs.
CONCLUSION
No bank in Nigeria has the unilateral or arbitrary power to restrict a customer’s account. Any restriction must be founded upon lawful authority and, where required by law, supported by a valid and subsisting court order.
Even where a restriction is initially lawfully imposed, it cannot be sustained indefinitely without legal justification. Once the administrative or judicial authority underpinning the restriction expires, or where the restriction is no longer supported by law, its continued enforcement becomes unlawful and may expose both the law enforcement agency and the bank to legal liability.
The rule of law requires that the fight against financial crime be pursued within the bounds of due process. A customer’s right to access and enjoy his funds cannot be suspended indefinitely on the basis of mere suspicion or expired authority.
— M. O. Idam
[email protected]
