National Bank of Ethiopia Warns about Surge in Fraud Cases at Banks

The National Bank of Ethiopia warned this month that Ethiopian banks are at operational risk, and this risk is likely to rise in the short to medium term. The cases of fraudulent activities and threats from employees and outsiders are rising. The money lost because of fraud and fake documents has nearly doubled in just one year, reaching 1 billion Birr. The revelations were made by the National Bank of Ethiopia in the recently released Financial Stability Report (FSR).

These incidents happened at 20 banks primarily because of the fake money and cheques, robberies, giving out fake guarantees, withdrawing cash from stolen ATM cards, and fake phone calls/messages. Moreover, three banks lost 20 million Birr from robberies by the end of June 2023.

Ethiopian banks want to introduce technology in their services, and many banks are increasingly taking steps to introduce digital micro-credit and services with the help of third parties. There is a risk that, as a result of these steps, fraudulent activities may rise. NBE urged the banks to take steps to mitigate these risks.

In the latest incident, a group of fraudsters allegedly led by Belay Mekonnen Deputy Manager of the Ethiopian Orthodox Church EOTC, attempted to defraud the African Union out of more than $6 million when one of the gang members tried to withdraw money from the Commercial Bank of Ethiopia branch in Addis Ababa. African Union authorities have filed a complaint with the Ethiopian Federal Police Commission. Read more…

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