Citigroup, a notable banking and financial services corporation, made an unfortunate blunder last year when it accidently deposited $81 trillion into a client’s account, instead of the intended $280. This financial mishap, which occurred in April, was overlooked by two employees but was detected and rectified within 90 minutes of the transaction, as initially reported by the Financial Times.
Although the error was swiftly reversed and reported to the Federal Reserve and Office of the Comptroller of the Currency as a ‘near miss’, it still adds to the growing list of operational mishaps the Wall Street bank has faced in recent years.
In a statement to NBC News, Citigroup addressed the error saying, “Although a payment of this magnitude could not have been processed, our detective controls quickly spotted and corrected the inputting mistake between two Citi ledger accounts. Our preventative controls would have also prevented any funds from leaving the bank. While there was no impact to the bank or our client, this incident highlights our ongoing efforts to automate controls and eliminate manual processes through our Transformation.”
Citigroup did not provide any comments or confirmation on the number of near misses it has experienced. A ‘near miss’ in banking is a situation where a bank processes an incorrect amount but manages to recover the funds. According to the report, the bank had 10 near misses of $1 billion or more last year and 13 in the preceding year.
The bank has been striving to mend its image since a major error five years ago where it mistakenly sent $900 million to creditors involved in a dispute over the debt of cosmetics group Revlon. This significant misstep led to the removal of former CEO Michael Corbat, substantial fines, and regulatory consent orders requiring Citigroup to rectify the issues.
Jane Fraser, Corbat’s successor, has emphasized that enhancing risk and controls is a top priority for the bank. Despite these efforts, the bank was still penalized $136 million by regulators last year for not making sufficient progress on the improvements.
For those interested in investing or simply keeping an eye on the banking sector, these incidents serve as a stark reminder of the importance of stringent operational controls and accuracy in the financial world.
