Last year, Citigroup found itself in a surprising situation when it accidentally credited a customer’s account with a whopping $81 trillion instead of the intended $280. This financial hiccup occurred in April and flew under the radar of two employees initially. Fortunately, the error was detected 90 minutes later, and it was set right within a few hours, as reported by the Financial Times. Recognized as a “near miss,” this incident was subsequently reported to the Federal Reserve and the Office of the Comptroller of the Currency.
This blunder is the latest in a series of operational slip-ups for the Wall Street banking giant, which has been grappling with similar challenges in recent years.
In a statement to NBC News, Citi clarified, “Although executing a payment of this magnitude was never feasible, our detective controls quickly spotted the error between two of our ledger accounts, and we corrected it. Our preventative measures would have also prevented any funds from actually leaving the bank. While neither our bank nor our client was affected, this incident highlights our ongoing commitment to eliminating manual processes and enhancing controls through our Transformation.”
Citi has not disclosed how many similar near misses have occurred, nor have they commented on this aspect. Near misses refer to instances where an erroneous transaction is detected and rectified before any actual financial impact. Last year, Citi experienced 10 such near misses involving amounts over $1 billion, with 13 occurring the year before.
The bank has been striving to rebuild its reputation ever since an erroneous $900 million transfer to creditors involved in a dispute over Revlon’s debt five years back. This mistake led to significant repercussions, including the former CEO Michael Corbat’s departure and substantial fines coupled with regulatory directives to address these issues.
Jane Fraser, who succeeded Corbat, has emphasized that enhancing risk management and controls is a crucial focus. Despite these efforts, the bank faced a $136 million fine from regulators last year for insufficient progress in these areas.
