BY MENGISTEAB TESHOME
Developing a viable and reliable financial system that could overcome the counterfeit approaches by various participants and stakeholders should be well managed in line with the law.
In this regard, following the currency change, private and public banks have managed to collect cash money that was unreasonably in circulation and brought it back to the financial system. According to estimates by the National Bank of Ethiopia (NBE), there were 92 billion Birr of unbanked cash in Ethiopia in July 2019.The move, however, has enabled a large number of people to open bank accounts.
The financial system that had been in practice for long in Ethiopia was too poor to comply with the up-to-date technology and professional values and led the system to become an epicenter of fraud for exploitative individuals and institutions alike, the statement noted.
Of late, it was reported that the NBE filed charges against some banks that showed tendency to work with shell banks; this is a commendable move because it helps to build a healthy financial system.
In addition, if this kind of tendency is left unchecked, the circulation of counterfeit currency can undermine the national economy, weaken financial institutions and jeopardize people’s livelihoods. It fuels the underground economy and finances the activities of organized criminal networks and terrorists.
It is clear that the fraudulent use of identity and travel documents – whether they are counterfeit, forged or simply unofficial – is a major threat to both individuals and society as a whole. It is one of the major challenges in upholding rule of law in the financial system. Recent developments in photographic, computer and printing technologies, along with the availability of low-cost equipment, have made forgery much easier. At the same time efforts to keep pace with the evolving scenario. Law enforcers in the financial sector need to master increasingly technical skills. Hence, such cases should be well screened through advanced technologies.
According to the report and the investigation of NBE, of the accused entities, many are violating the recently imposed account to account restriction on money transfer. NBE issued only five individuals or entities that had been found in violating the NBE rule and regulation a week ago, according to the report massive transfer occurred within a very short period.
The investigation of the central bank shows that suspected transactions conducted by an individual have been growing in thousands. The transactions observed at some banks and debit and indebt do not comply with the directives of NBE.
It is crystal clear that this act of breaching the rule is a bold manifestation of violating the rule of law and harming the economy. In order to avert this ill mind driven act, efforts to progressive action should be strengthened and the entities accountable for practice should be abided by the rule and regulation of the land and must summit and kind of inconvenience in conventional fashion they come across.
The order of NBE, to all pertinent stakeholders in accordance to terminate their business relation with 64 individuals and an institution is commendable.
In this regard, NBE should further strengthen its efforts to uphold the rule of law and let the private and public banks respect it through well framed suppression as well as professionalism.
“NBE also should trace the tendency of some private banks to work with shell banks (entities with no license that do financial services in Ethiopia),” the circular reads.
Ethiopia had introduced the new notes of currency and the directives of financial transaction procedure in the past months to undo the challenges in money counterfeiting and money laundering activities and with vision to building a healthy financial system.
Finally, as counterfeiting is a crime dating back to antiquity NBE should be ready to address and manage it early and push pertinent stakeholders to discharge responsibilities to build a reliable and healthy financial system just by proactive engagements and applying rule of law in the financial sector, the report indicated
The Ethiopian Herald 12 February 2021
