Commercial bank of Ethiopia suffer loses due to system error

Ethiopia’s Commercial Bank Lost Billions Over Software Glitch

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“Customers who withdrew more money than was in their accounts because of a glitch cannot “escape” the law.” – CBE president.

Within hours, Ethiopia’s State-owned Commercial Bank reportedly suffered a loss of billion of Birr due to a “system error” that affects mainly its online banking system.

This mishap has turned into a bonanza for hundreds of ATM customers during the late hours of last Friday night, specifically between 12 a.m. and 3 a.m., who were afforded the opportunity to withdrew more money than they had in their account.

As per the BBC report, it’s estimated that over 2.4 billion Birr (equivalent to $40 million) was withdrawn or transferred to other banks when customers discovered they could withdraw more cash than their account balances allowed.

Before the issues were detected, a total of 490,000 transactions had been conducted.

Most of the alleged money transfer transactions and ATM withdrawals were observed to be conducted by university students, particularly in Addis Ababa and Jimma.

The bank has stated that it is making efforts to recover the funds by forming a task force. Initially, it plans to pursue individuals who took advantage of the “system failure” to return the money by the end of the week or face arrest and prosecution.

During an interview with the BBC Newsday program, CBE President Abe Sano stated on Wednesday that the bank has successfully traced most of the transactions conducted during the glitch.

When asked about whether CBE would report individuals who fail to return the money to the police, Mr. Abe responded:

“Yes, absolutely. We are already taking action.”

He added that the bank will take legal action against those who will not have returned the funds “after this weekend”.

“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 some of the customers who withdrew excess money have already returned it to the bank.

He, however, disputed the reports that customers took 2.4 billion birr, saying the amount taken was far smaller but will be accurately determined after an ongoing audit is completed later this week.

Mr Sano added that the audit is being done because some of the 10,000 customers who transacted during the glitch conducted legitimate transactions. [TesfaNews]