Following a technical incident, no less than 40 million dollars were withdrawn from the largest Ethiopian bank or transferred to other banks.
The Commercial Bank of Ethiopia (CBE), the country’s largest commercial bank, recently faced a serious financial problem. A glitch in the system allowed its customers to withdraw considerable sums of money, often far exceeding the available balance in their accounts. As early as Saturday morning, March 16, customers were surprised to find that they could withdraw more money than they had in their accounts, resulting in the withdrawal or transfer of more than 40 million dollars, according to local media.
The bank’s reaction was immediate, but the measures taken took time to produce their effects, giving way to chaotic scenes on university campuses and raising questions about the financial security of customers, who number no less than 38 millions to entrust their money to the CBE.
The rush for money on Ethiopian campuses
It was students who were the first to take advantage of this loophole in the banking system. Alerted by messages circulating on messaging applications, they quickly went to ATMs or via their banking applications to make transfers to other accounts, or withdraw large sums of money. Long queues at ATMs formed, and students were able to withdraw money until the university and police authorities intervened to put an end to this unusual gold rush.
Specifically, a student from Jimma University said he withdrew 10,000 birr (around $220) before the bank blocked the transactions. He said he used the money to buy a new cell phone and clothes. Another Dilla University student said he transferred 20,000 birr (about $440) to his brother’s account.
Despite subsequent statements from university authorities asking students to return the money, few cases have been reported so far. Some campuses even saw the presence of bank employees, trying to recover lost funds.
Recovery efforts and uncertainties
Faced with this crisis, the CBE reacted firmly, freezing all transactions and taking measures to limit the financial consequences. The bank president assured that the loss suffered was minimal compared to the bank’s overall assets and insisted that there had been no cyber attack. The bank also issued statements encouraging customers to return any money improperly withdrawn, clarifying that no legal action would be taken against them.
However, it remains unclear how successful these recovery efforts will be. Despite appeals from the authorities and the bank, few customers have returned the money so far, leaving doubt over the outcome of this case for the Commercial Bank of Ethiopia.
The CBE has set up an online platform to facilitate the return of funds. Mobile teams have also been deployed to universities to collect money from students. The bank worked with local authorities to identify customers who withdrew large sums of money.
Source : BBC, Fortune (paid access)
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