icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
21 Mar, 2024 09:46

African country seeks to recover millions lost in banking glitch

Customers who withdrew more than they own during a weekend system flaw will face prosecution, Ethiopia’s commercial bank has warned
African country seeks to recover millions lost in banking glitch

A banking system glitch in Ethiopia over the weekend allowed customers to withdraw more than they had in their accounts, with the East African nation’s largest bank reportedly scrambling to recover more than $40 million lost in the incident.

According to local media, long lines formed at cash machines across the country on Saturday after the issue was discovered at the state-owned Commercial Bank of Ethiopia (CBE).

CBE President Abe Sano told reporters on Monday that university students who spread word of the malfunction on social media withdrew a large portion of the funds. He said half a million transactions were completed during the glitch, but did not specify the amount of money withdrawn. The Addis Fortune newspaper reported that nearly 2.4 billion Ethiopian birr ($42 million) has been lost.

In an earlier statement, the National Bank of Ethiopia, which regulates the financial sector, said the “service disruption” at the CEB was caused by a “regular system update and inspection” and not a cyberattack.

“The National Bank of Ethiopia will carry out the necessary investigations and inform the public about the problems caused by the problem, including the abuse of customers,” the central bank said on Sunday.

It reportedly took several hours for the institution, which has been in operation for over eight decades and currently serves approximately 40 million customers, to freeze transactions.

On Wednesday, Abe warned in an interview with the BBC that clients who withdrew more than was in their accounts would be prosecuted if they did not return the money by the end of the week.

“There is no way that they can escape because they are digital [transactions] and they are our customers. We know them. They are traceable and they are legally accountable for what they did,” he said.

He added that while the bank is in the process of filing a police report, an audit will be completed later this week in order to determine the exact amount taken.