Citigroup mistakenly credited a client’s account with US$81 trillion instead of the intended US$280 due to an input error, raising concerns about the bank’s operational controls.
The error, which occurred in April last year, was initially overlooked by both a payments employee and a second official responsible for verifying the transaction before processing.
It was only identified 90 minutes later when a third employee noticed an issue with the bank’s account balances. The transaction was subsequently reversed within a few hours.
According to the Financial Times, Citi disclosed the “near miss” to the Federal Reserve and the Office of the Comptroller of the Currency.
However, no funds left the bank.
Citi stated that its internal controls promptly flagged the mistake between its ledger accounts and prevented any financial loss.
The bank emphasised its commitment to reducing manual processes and automating controls to prevent similar incidents.
An internal report revealed that Citi experienced ten near misses of US$1 billion or more in the past year, slightly lower than the 13 recorded the previous year.
These incidents, where incorrect amounts are processed but successfully recovered, are not required to be reported to regulators, making it difficult to assess their frequency across the banking sector.
Industry experts have noted that such large-scale near misses are rare among US banks.
This latest incident underscores Citi’s ongoing struggle to resolve longstanding operational issues.
Nearly five years ago, the bank mistakenly sent US$900 million to creditors involved in a legal dispute over Revlon’s debt, a blunder that led to leadership changes, significant fines, and regulatory scrutiny.
Since taking over as CEO in 2021, Jane Fraser has prioritised addressing these regulatory concerns, but Citi was still fined US$136 million last year for failing to rectify deficiencies in risk control and data management.
The US$81 trillion error resulted from a manual input mistake exacerbated by a cumbersome back-up system, according to sources familiar with the event.
In March, four payments totalling US$280, intended for a client’s escrow account in Brazil, were flagged for potential sanction violations and subsequently held in Citi’s system.
Although the payments were later cleared, they remained stuck in processing.
Citi’s technology team advised a payments processing employee to manually enter the transactions into a rarely used back-up interface.
A design flaw in the system pre-populated the amount field with 15 zeros, which the employee failed to delete, resulting in the erroneous transaction.
Featured image credit: edited from freepik
