Citigroup Inc. mistakenly credited a client’s account with $81 trillion instead of the intended $280, an error that could complicate the bank’s efforts to assure regulators that it has resolved its longstanding operational weaknesses.
The internal transaction error, which occurred last April and had not been publicly reported until now, slipped past both a payments employee and a second official responsible for reviewing transactions before they are approved.
A third employee later spotted discrepancies in the bank’s account balances, identifying the issue 90 minutes after the erroneous credit was posted. The payment was subsequently reversed several hours later, according to an internal report seen by the Financial Times and two sources familiar with the incident.
Although no actual funds left Citigroup, the bank informed the Federal Reserve and the Office of the Comptroller of the Currency (OCC) about the mistake.
A Citigroup spokesperson stated:
“Our detective controls promptly identified the inputting error between two Citi ledger accounts, and we reversed the entry. These mechanisms would have also stopped any funds from leaving the bank.”
While the bank emphasized that the error had no financial impact on Citi or its client, it acknowledged that the incident highlights ongoing efforts to eliminate manual processes and automate controls.
Internal reports reveal that Citi experienced 10 separate “near misses” in 2023, where incorrect amounts exceeding $1 billion were processed but later recovered. This was down slightly from 13 similar incidents the previous year.
Since near misses are not required to be reported to regulators, there is no comprehensive public record of how often they occur across the banking sector. However, former regulators and banking risk managers told the Financial Times that near misses of more than $1 billion are rare in the U.S. banking industry.
The bank has been under intense regulatory scrutiny since its infamous $900 million mistaken payment to Revlon creditors in 2020—an error that led to:
Citi’s current CEO, Jane Fraser, who took over in 2021, has repeatedly called fixing regulatory issues her “top priority”. However, the bank was fined $136 million in 2023 by the OCC and Federal Reserve for failing to correct ongoing risk control and data management deficiencies.
The April incident was triggered by an inputting mistake combined with a backup system featuring a flawed user interface, sources familiar with the matter said.
The issue stemmed from four transactions totaling $280, which were meant for a client’s escrow account in Brazil. The payments were temporarily flagged as potential sanction violations, delaying their processing. While the transactions were eventually cleared, they remained stuck in Citi’s system, leading to the massive input error.
As Citi continues to battle regulatory challenges, this latest revelation raises fresh questions about whether the bank’s internal controls and risk management systems have truly improved.
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