A CEO Deposit Probe has Exposed Deeper Problems at Ethiopia’s Global Bank

Ethiopia’s central bank has removed the chief executive of Global Bank Ethiopia and barred him from senior roles in the country’s financial sector for five years after a special inspection found deficiencies in governance, lending, foreign exchange operations and financial management.

The National Bank of Ethiopia removed Tesfaye Boru from his position effective July 28 and barred him from serving in senior executive or board positions at any Ethiopian financial institution, citing provisions of the Banking Business Proclamation No. 1360/2025 and a banking supervision directive.

The action followed an investigation into the bank and came after earlier warnings to Tesfaye, underscoring the central bank’s increasingly assertive approach to banking-sector supervision as Ethiopia reforms its financial system and seeks to strengthen confidence in commercial banks.

The NBE’s inspection identified deficiencies in corporate governance, lending and credit administration, human-resource management, foreign exchange operations and overall financial management, according to the removal order.

The inspection followed an NBE inquiry into the alleged rapid withdrawal of a time deposit worth hundreds of millions of birr, according to earlier reporting. Global Bank’s board subsequently began its own review at the request of shareholders after the central bank inquiry was launched.

The central bank cited written warnings issued to Tesfaye in May 2021 and November 2024 in its decision to remove him. It said the seriousness of the inspection findings, together with his previous regulatory history, warranted the five-year ban.

Global Bank’s board said in a statement that the removal of Tesfaye and six other executives was part of a governance and compliance overhaul following internal evaluations and directives from the central bank.

The board had by early August suspended 18 executives, including a board member, as the investigation widened.

The bank said the executives eventually terminated included Tesfaye and six senior executives and managers: the former vice president of core banking, three department directors, a branch manager and a district operations manager.

The leadership changes come as Ethiopia’s banking sector undergoes significant regulatory and structural changes.

The NBE has been tightening supervision while pursuing reforms intended to increase competition, strengthen banks’ capital positions and modernize the financial system. The regulator has also been moving toward a more market-oriented foreign exchange regime, increasing the importance of banks’ risk management and compliance systems.

Global Bank’s board initially nominated Chief Corporate Banking Officer Sahlemichael Mekonnen as acting president. The central bank rejected the nomination, saying he did not meet the legal requirements for the position.

The bank subsequently appointed Sahlemichael as acting chief executive officer, according to an August 8 announcement.

Global Bank said it had submitted a corrective action plan to the NBE addressing the inspection findings and that its actions were in compliance with regulatory directives. It said normal commercial operations, branch services and digital banking platforms remained functional.

The bank reported paid-up capital of 5 billion birr, meeting the NBE’s capital requirement introduced for June 2026 ahead of the deadline. Its total assets increased 42% to more than 34.4 billion birr, while customer deposits rose 41% to 25.75 billion birr, according to the board’s statement.

The episode illustrates the growing regulatory pressure on Ethiopia’s commercial banks as they expand rapidly and take on a larger role in an economy undergoing financial liberalization.

Ethiopia’s banking industry has historically been dominated by domestic institutions, with the sector operating under extensive state regulation. The government has in recent years pursued reforms aimed at attracting foreign investment, increasing competition and broadening access to financial services.

The NBE’s actions against Global Bank also highlight the importance of governance and controls as Ethiopian banks expand their balance sheets and increase their exposure to lending, foreign exchange and digital financial services.

Neither the central bank nor Global Bank immediately provided further details on the deposit inquiry beyond the information contained in the regulatory and corporate disclosures.

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