Ethiopia’s largest commercial bank, the Commercial Bank of Ethiopia (CBE), finds itself in a challenging situation as it works to recover substantial amounts of money withdrawn by customers following a “systems glitch” that occurred over the weekend.
Customers discovered on Saturday morning that they could withdraw more cash than the balance in their accounts at CBE, leading to a rush of withdrawals and transfers totalling over $40 million, according to local media reports.
Bank president Abe Sano disclosed to journalists on Monday that much of the withdrawn funds came from state-owned CBE and were predominantly withdrawn by students. The news of the glitch spread rapidly across universities, primarily through messaging apps and phone calls.
Reports emerged of long queues forming at campus ATMs, with some students withdrawing money until police intervention halted the transactions. Despite initial disbelief, students across various universities confirmed successful withdrawals and transfers from the banking app, contributing to the surge in cash outflows.
While CBE eventually froze transactions, it took several hours to implement this measure, exacerbating the situation. The central bank of Ethiopia attributed the incident to a “glitch” during routine maintenance activities but did not address the specific amount withdrawn by customers.
Mr. Sano reassured the public that CBE had not suffered a cyber-attack and emphasized that customer accounts remained secure. However, concerns linger over the success of efforts to reclaim the withdrawn funds.
At least three universities issued statements urging students to return any misappropriated funds to CBE voluntarily. Mr. Sano assured that individuals returning money would not face criminal charges.
Despite these efforts, the extent of success in recovering the withdrawn funds remains uncertain. While some students reported seeing bank employees collecting returned money voluntarily, others indicated a lack of awareness or willingness to comply.
The incident underscores the challenges faced by financial institutions in ensuring the integrity of their systems and the need for robust measures to mitigate such incidents in the future.
Ozioma Samuel-Ugwuezi
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