The National Bank of Ethiopia (NBE) has disclosed that a staggering 1.3 billion birr was lost to fraud across 28 Ethiopian banks during the 2023/24 fiscal year, marking a sharp rise in financial crimes targeting the country’s banking sector.
According to the NBE’s annual Financial Security Report, which covers transactions and operations up to June 2024, the fraudulent losses increased by 300 million birr compared to the previous year. The report highlights a variety of methods used by criminals to defraud banks, including counterfeit banknotes, stolen ATM machines, forged checks, fake phone calls, and other deception techniques.
Of the 31 banks operating in Ethiopia, 28 were affected by various forms of fraud. The report did not disclose the identities of the three banks that were reportedly not impacted.
While specific figures and breakdowns for each institution remain undisclosed, the NBE noted that the rising use of technology and the growing collaboration between commercial banks and microfinance institutions in providing loans may have inadvertently increased the vulnerability of financial institutions to internet-related scams and organized fraud networks.
The data, partially sourced from the Federal Ethics and Anti-Corruption Commission, also underscores growing concerns about the effectiveness of internal controls, digital security infrastructure, and customer awareness within the financial system.
The NBE has not released a list of the defrauded banks, fueling public speculation about the level of transparency and preparedness within the sector to combat fraud.
Industry observers have called for more robust cybersecurity measures, greater inter-bank cooperation, and stronger enforcement mechanisms to deter future attacks and protect depositors’ funds. Meanwhile, the NBE is expected to intensify its oversight and strengthen financial sector regulations in response to the growing threat.
Source: Tikvah Ethiopia
