A Federal High Court in Abuja has dismissed a N374 billion lawsuit filed by the Ginger Growers, Processors, and Marketers Association of Nigeria against Keystone Bank.
The case was related to the bank’s handling of funds from the Central Bank of Nigeria (CBN) under the Anchor Borrowers’ Programme, which was established in 2015 to support smallholder farmers by facilitating access to loans.
Justice Obiora Egwuatu ruled that the suit should be struck out on the grounds of jurisdiction.
He highlighted that the plaintiffs had failed to follow the required procedure of serving a pre-action notice to Keystone Bank, as stipulated in their contractual agreement.
The legal action, representing 31,309 farmers, accused Keystone Bank of not disbursing N8.6 billion out of a N335 billion loan allocated to them, despite receiving the funds from the CBN in March 2020.
The plaintiffs sought an additional N30 billion in damages, claiming breach of the banker-customer relationship.
The farmers’ association, which is a registered cooperative, had nominated Keystone Bank as its designated Participating Financial Institution for the programme.
They argued that the CBN had released the loan amount to the bank with the expectation that it would be disbursed to the farmers within 10 working days.
However, the plaintiffs contended that Keystone Bank delayed informing them of the loan approval until July 2020, failed to meet the disbursement deadline, and kept the funds for over five months before eventually returning the loan to the CBN without notifying the farmers.
The plaintiffs also accused the bank of misappropriating the N8.6 billion it had received from the CBN, which was meant solely for the farmers’ benefit.
In response, Keystone Bank, represented by Dr. Sonny Ajala (SAN), denied the allegations, asserting that the guidelines for the Anchor Borrowers’ Programme were advisory in nature and lacked legal enforceability.
