Ethiopia's largest bank is struggling to recoup millions of dollars after a glitch over the weekend allowed customers to withdraw unlimited funds, according to local media reports.

More than $40 million was reportedly withdrawn from the state-owned Commercial Bank of Ethiopia or transferred to other banks, as customers discovered they could withdraw more than their total balance. Transactions were, however, halted several hours later.

Local media reported that long lines formed at cash machines across Ethiopia after the problem was discovered at the Commercial Bank of Ethiopia, with people patiently waiting for hours to make withdrawals totalling into millions.

News of the technical glitch was spread on social media mainly by university students, who withdrew much of the money, said the bank’s CEO, Abe Sano.

The bank has not said how much was withdrawn, but Abe told reporters that half a million transactions were made during the glitch.

A local newspaper reported that $42 million (Ksh. 5.6 billion) was lost.

The bank's President Abie Sano admitted to a press conference on Monday that a large portion of the cash was withdrawn by students also urging them to return the cash. 

Several universities also urged students to return cash that isn't theirs, and Sano reportedly told a press conference that anybody who returns the money will not be criminally prosecuted.

In a post on X, the CBE confirmed the service interruption but denied that it was the result of a cyber attack. It added that its ATM services were now "fully operational."

Ethiopia's central bank, which oversees its financial sector, said in a statement that the interruption was a result of system security checks and "not an incident that endangers the bank, its customers and the entire financial system."

In an interview with the BBC's Newsday programme on Wednesday, CBE president Abe Sano said the bank would take legal action against those who do not give back the funds by the end of the week.

"There is no way that they can escape because they are digital [transactions] and they are our customers. We know them. They are traceable and they are legally accountable for what they did," he said.

CBE, established 82 years ago, serves over 38 million account holders.