Ethiopia’s Largest Bank Struggles to Recover Funds After “Systems Glitch”
ADDIS ABABA — In a frenzy to recoup substantial amounts of money withdrawn by customers following a “systems glitch,” Ethiopia’s largest commercial bank is in crisis mode.
Customers were astounded early on Saturday when they discovered they could withdraw more cash than their account balances at the Commercial Bank of Ethiopia (CBE).
Local media reported that over $40m (£31m) was either withdrawn or transferred to other banks before the institution was able to freeze transactions, which took several hours.
CBE’s president, Abe Sano, revealed that a significant portion of the money was withdrawn by students from the state-owned bank.
Word of the glitch rapidly spread throughout universities via messaging apps and phone calls.
At campuses across the country, long lines formed at ATMs, with one student in western Ethiopia informing BBC Amharic that people were withdrawing money until police intervention stopped them.
Disbelieving at first, a student at Jimma University Institute of Technology recounted how friends informed him around 01:00 local time (22:00 GMT) that it was possible to withdraw large sums from ATMs or transfer money using the bank’s app.
Similarly, a student at Dilla University in southern Ethiopia mentioned that several peers retrieved money from CBE between midnight and 02:00 local time.
With over 38 million account holders, CBE, which has been in operation for 82 years, faces a significant challenge in recovering the lost funds.
Ethiopia’s central bank, the governing body of the financial sector, issued a statement on Sunday attributing the incident to a “glitch” during “maintenance and inspection activities.”
However, the statement primarily addressed the service interruption following CBE’s decision to freeze all transactions and did not address the funds withdrawn by customers.
While Sano did not disclose the exact amount withdrawn, he assured that the loss was minimal compared to the bank’s total assets and clarified that CBE was not subjected to a cyber-attack, ensuring customers that their personal accounts remained secure.
Despite three universities urging students to return any wrongfully obtained funds from CBE, the success of the bank’s recovery efforts remains uncertain.
The student from Jimma University indicated that as of Monday, he had not heard of any money being returned, despite police presence on campus.
An official at Dilla University mentioned that bank employees were on campus collecting voluntarily returned funds from students. — BBC
