Exploring Legal Gaps and Practical Challenges in Resolving Electronic Banking Disputes in Ethiopia: A Case Study of Mekelle City

Abstract

It is undeniable that e-banking offers major benefits—not just for customers and banks, but for the economy as a whole. But that does not mean it is perfect. In fact, disputes related to e-banking are becoming more frequent and complex in Ethiopia. This study looks at whether the current legal system in Ethiopia is equipped to handle these kinds of disputes and explores the real-world challenges involved in resolving them. To do this, the research uses both doctrinal and empirical types, following a qualitative approach. One of the key findings is that Ethiopia does not yet have a comprehensive legal framework or a dedicated forum specifically focused on resolving e-banking disputes. The existing laws do not clearly lay out how these disputes arising between and among customers, banks, and interbank should be handled. Beyond the legal gaps, there are also serious practical challenges. These include low customer awareness about how to handle e-banking problems, a lack of alternative dispute resolution institutions, poorly trained professionals in the field, outdated procedural rules, and the limited ability of the National Bank of Ethiopia (NBE) to get involved in dispute resolution. On top of that, many banks tend to shift the burden of liability onto customers, and the country still struggles with weak technological infrastructure and poor systems to prevent cybercrime and fraud. Given these issues, the study recommends that the Ethiopian government develop a dedicated legal framework tailored to the unique and fast-changing nature of e-banking disputes. It should also set up a specialized body or institution to deal with such disputes independently. The NBE and commercial banks need to lead the way in pushing for these reforms. Banks should take steps to raise customer awareness about e-banking and options available for resolving issues. At the same time, they should adopt stronger security and fraud prevention standards.