The National Bank of Ethiopia (NBE) has further prohibited making over five cash transfers a week from a single bank account to multiple accounts via mobile and internet banking; Automated Teller Machine (ATM) and Point of Sale (PoS) terminals; and electronic accounts that operate through mobile money services.
Last month the regulatory bank limited transactions from a single account to multiple accounts through account-to-account transfer to just five a week, reversing the previous unlimited policy. Thus, with the latest circular issued a week ago, an account holder cannot make more than five transfers a week from an account via any transaction channel.
Signed by Solomon Desta, the vice governor of the central bank in charge of financial institutions supervision, the latest circular exempted deposit accounts of the government, state-owned enterprises, government universities, international organisations and embassies from the weekly transaction restriction.
However, the prohibition is not applicable to account holders in effecting utility payments, buying mobile top-ups and making salary payments. Transactions effected by financial institutions from their accounts are also exempted from the restriction.
The latest circular also entitles commercial banks to conduct due diligence and exempt private businesses and non-government organisations from the restrictions. The banks can spare established businesses that have a trusted business relationship with the respective bank from the prohibition, according to the circular.
Since early 2020, the central bank has been imposing limits on transactions and cash withdrawals.
The regulatory bank imposed a restriction on the depositing of money on behalf of another account in mid-September 2020 following the currency changeover, only allowing account-to-account transfers.
In May 2020, the regulator put a 100,000 Br daily and a million Birr monthly withdrawal limit on individuals and a 300,000 Br daily and 2.5 million Br monthly withdrawal cap on businesses. A few months later in October, the central bank altered the directive and decreased the daily withdrawal limit to 50,000 Br for individuals and 75,000 Br for businesses.
Two weeks ago, the central bank reported that it has identified individuals that made multiple account-to-account transactions between July and September. The due diligence conducted by the bank demonstrated that 20,178 account holders made more than 1.4 million transactions in just three months through all the banks.
According to the report, a single individual recorded the highest 4,974 monthly transactions through the Commercial Bank of Ethiopia (CBE). Simultaneously, the highest daily transaction recorded at 482 was made by a single person through the Bank of Abyssinia. The central bank also listed 20 individuals who made 44,020 transactions in the three-month period mainly through CBE.
In its letter, the central bank ordered all commercial banks to refrain from opening an account for these individuals whose transactions were allegedly suspicious. The banks were also told not to commence any business relationships with them.