Ethiopia’s financial sector faces a tumultuous period as the nation’s largest commercial bank, the Commercial Bank of Ethiopia (CBE), grapples with the aftermath of a significant “systems glitch” that permitted customers to withdraw millions of dollars beyond their account balances.
Reports emerged over the weekend revealing that customers were able to withdraw excess cash from their accounts at CBE, prompting a rush of withdrawals and transfers totaling over $40 million. Bank president Abe Sano acknowledged the situation on Monday, highlighting that a significant portion of the withdrawn funds originated from state-owned CBE and were primarily accessed by students.
The glitch quickly spread across universities, leading to long queues forming at campus ATMs as students sought to capitalize on the unexpected windfall. Despite attempts by the authorities to intervene and halt the transactions, successful withdrawals were confirmed, exacerbating the outflow of cash.
While CBE eventually managed to freeze transactions, the delay in implementing this measure worsened the situation. The central bank of Ethiopia attributed the incident to a “glitch” during routine maintenance activities but did not disclose the specific amount withdrawn by customers.
Mr. Sano assured the public that CBE had not fallen victim to a cyber-attack and emphasized the security of customer accounts. However, concerns persist regarding the successful recovery of the withdrawn funds.
In response, several universities issued statements urging students to return any misappropriated funds voluntarily. Mr. Sano offered assurances that individuals returning money would not face criminal charges.
Despite these efforts, the outcome of reclaiming the withdrawn funds remains uncertain. While some students reported witnessing bank employees collecting returned money voluntarily, others displayed a lack of awareness or willingness to comply.
The incident sheds light on the challenges faced by financial institutions in safeguarding the integrity of their systems and underscores the importance of implementing robust measures to prevent such occurrences in the future.
