CBE blocked private banks accounts

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The state owned Commercial Bank of Ethiopia’s (CBE) measure to suspend the bank accounts of the country’s sixteen private banks has created confusion among bank managers, Capital  has learned.
A bank president Capital talked to said that CBE’s measure will affect the financial transactions of all banks.
They said that as of Monday September 16 the bank had disclosed via circular that it has blocked the bank accounts of all private banks that have accounts at various branches of CBE.
“The payment system in the banking sector has been the same for every bank, so CBE’s measure has confused us because it will not only affect us but it will have a larger effect on CBE’s payment system,” one of the biggest private bank leader explained.
He said that the bank has the right to reject a relationship with another bank but it will not benefit any bank.
Some bank officials also said that the measure may affect the banking sector, while they believe that it will not continue in this manner. Others complained that the bank does not have the right to take this kind of measure.
According to some banks presidents Capital talked to, they did not meet CBE officials to discuss the issue nor do they know the reason the bank decided to take this measure.
“We do not have any information as to why the CBE blocked private banks’ accounts, but we plan to meet the management of the bank,” one bank president said.
Experts on the banking sector told Capital that there is not any legal framework by which banks are forced to have accounts with each other, but they [the banks] usually use this method to settle some payment with each other within a limited period. “This scheme makes the payment system more efficient than transferring some amount from one bank to another,” the expert said.
Capital’s efforts to reach Bekalu Zeleke, president of CBE, on Friday September 20 were not fruitful.