Business

Commercial Bank Of Ethiopia Recovers $10 Million From $14 Million System Glitch Loss

Approximately 490,000 transactions had already been performed when the bank discovered the mistake, raising fears about extra cash withdrawals.

Commercial Bank Of Ethiopia Recovers $10 Million
Commercial Bank Of Ethiopia [PHOTO CREDIT: Tech Point Africa]

The Commercial Bank of Ethiopia (CBE), the country’s main commercial bank, has recovered $10 million of the $14 million lost due to a technology glitch. The incident, which made quite a sensation, sparked a rise in customer traffic to campus ATMs, resulting in long lines. Approximately 490,000 transactions had already been performed when the bank discovered the mistake, raising fears about extra cash withdrawals. Notably, three colleges asked students to repay any excess monies withdrawn from the bank.

CEO Abie Sano has sent out a strong warning, stating that noncompliance with returning the surplus monies will result in legal action. The bank is aggressively working with law enforcement to make sure that its clients are holding themselves accountable. Sano stressed that digital transactions are traceable and that clients cannot avoid accountability for their conduct.

The investigation is still ongoing, but the bank has not disclosed the primary cause of the failure. To reassure customers, management did not refer to the issue as a cyberattack but rather as a system malfunction.

The Commercial Bank of Ethiopia, with an 82-year history, is a significant player in the country’s financial landscape, managing approximately 38 million accounts. As of mid-2021, it accounted for roughly 67% of all deposits and 53% of all bank loans in Ethiopia.

This incident highlights the issues that African banks face, particularly the growing threat of cyberattacks. Recent examples include fraudulent withdrawals from I&M Bank Rwanda, which resulted in a loss of $10.3 million in May 2023, and fraudulent activity at Absa Bank Kenya, which recorded a loss of KSh 107.7 million ($716,566) in October 2023. Despite these failures, proactive initiatives such as internal fraud risk reduction have helped some institutions reduce losses and begin recovery efforts.

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