February 27, 2025
In a drastic move to curb mounting fraud, the Commercial Bank of Ethiopia (CBE) has significantly restricted access to customer account balances, a policy shift that threatens to complicate the bank’s service delivery. As of February 24, 2025, tellers across the country no longer have access to account balances, leaving this privilege solely to senior officials, including Branch Managers and Business Managers.
The change, outlined in a memo from CBE’s Acting Director of Retail Business Development, Kidus Minyishu, aims to address the growing concerns over widespread fraud affecting the bank, which holds a commanding share of Ethiopia’s financial market. The bank, responsible for more than 60% of the nation’s bank deposits, has been a prime target in a wave of financial crime that has put both CBE and Ethiopia’s broader banking infrastructure under increasing strain.
A Rising Tide of Financial Crimes
The decision to limit access to account balances follows a troubling surge in fraudulent activities across Ethiopia’s banking sector. According to the National Bank of Ethiopia’s (NBE) 2023 Financial Stability Report, the number of fraud incidents doubled, reaching a staggering one billion birr in the past fiscal year. Further NBE updates indicate that fraud losses soared to 1.3 billion birr in 2023/24, a stark increase from the previous year, with scams targeting both customers and banking systems alike.
These fraudulent schemes span a wide range of activities, from counterfeit currency and check forgery to ATM card theft and phishing scams. The rise of digital banking and the expansion of third-party services, which often involve external vendors and partners, have only exacerbated the risk of exploitation.
CBE’s own vulnerability to these fraudulent activities has been glaring. A 2022 Ministry of Justice report revealed that CBE accounted for nearly half of the banking sector’s total fraud losses over the past four years, with an eye-watering 900 million birr siphoned from its operations. These statistics have underscored the bank’s urgent need for reform to safeguard its operations and protect customer assets.
Fraud-Related Scams Hit Hard
The rise of digital banking has been both a boon and a bane for Ethiopia’s financial institutions. Electronic payment fraud, for example, has become increasingly prevalent, with such scams now making up 14% of the total fraud cases in the country. In particular, mobile banking scams have gained traction, with unauthorized withdrawals becoming an ever-present threat.
One of the most notable incidents was the unauthorized withdrawal of 14 million US dollars due to a system glitch in March 2024. Although the bank managed to recover 99% of the funds, the incident raised serious concerns about the effectiveness of CBE’s security infrastructure and the institution’s handling of the situation. Critics pointed out that the public disclosure of the names of the accused, in particular, raised ethical and legal questions.
Even high-profile institutions like the African Union have not been immune to these threats. In April 2024, the AU narrowly avoided a six-million-dollar fraudulent withdrawal from its account at CBE, further highlighting the massive scale of these fraud attempts.
Policy Change: A Necessary but Disruptive Step?
With fraud incidents increasing at an alarming rate, CBE’s policy shift has been described as both a necessary measure and a potential source of frustration for customers. The new access restrictions have been implemented to ensure that only top-level managers—Branch Managers and Business Managers at major branches, and selected officials at smaller locations—can view account balances.
The policy, while aimed at reducing the risk of fraud, is expected to slow down service delivery at CBE branches. Tellers, who previously had access to account information, will now face significant delays when responding to customer inquiries. This shift could result in longer waiting times for customers, raising concerns about the bank’s ability to provide efficient service.
While the new restrictions may provide some immediate relief from fraud risks, they are unlikely to be a complete solution. According to the NBE, banks across Ethiopia must focus not only on tightening internal controls but also on implementing more robust technological measures to guard against increasingly sophisticated fraud techniques.
For CBE, improving its cybersecurity infrastructure is paramount. Given the size and scope of its operations, the bank’s exposure to digital fraud is disproportionately high, making it a primary target for both domestic and international criminals. The implementation of advanced fraud detection systems, real-time transaction monitoring, and stronger partnerships with tech firms specializing in digital security could go a long way toward mitigating these risks.
As Ethiopia’s largest and most influential bank, CBE’s efforts to address these challenges will have ripple effects throughout the financial sector. If CBE succeeds in strengthening its internal controls and rebuilding customer trust, other banks in Ethiopia may follow suit, potentially sparking a broader reform in the country’s banking landscape.
However, as these measures unfold, CBE’s customers will likely experience mixed feelings. While the move to limit access to account balances might help protect their assets, it may also lead to longer wait times and potentially even more frustration as they navigate the system’s evolving security measures. Ultimately, the success of CBE’s strategy will depend on its ability to balance security with customer service, ensuring that it can protect its assets without alienating the very clients it aims to safeguard.
