Five years after Citigroup mistakenly transferred $900 million to creditors locked in a legal dispute over Revlon’s debt—an incident that severely damaged the bank’s reputation—history has repeated itself. The financial institution has once again found itself at the center of a major operational blunder, one that could further complicate its efforts to regain regulatory trust.
According to the Financial Times, Citigroup erroneously credited a client’s account with an astonishing $81 trillion, despite the intended transaction being only $280. The mistake, which occurred in April, highlights persistent operational vulnerabilities within the bank’s systems. It also raises questions about whether Citigroup has adequately addressed the longstanding risks that have previously resulted in regulatory scrutiny.
The error originated from a manual input issue and a cumbersome back-up system interface. In March, four payments totaling $280 were meant for a client’s escrow account in Brazil but were initially blocked due to the bank’s sanction-screening system. While the payments were later cleared, they remained stuck in the bank’s processing system.
Citigroup’s technology team instructed a payments-processing employee to re-enter the transactions manually using a rarely utilized back-up system. However, this system had a peculiar flaw: the transaction amount field was pre-filled with 15 zeros, requiring manual deletion. In this case, the employee failed to remove the extra digits, resulting in the massive $81 trillion entry.
The mistake went unnoticed by both the employee responsible for processing the payment and a second official tasked with verifying transactions. It was only detected by a third employee, who noticed irregularities in the bank’s account balances 90 minutes after the transaction had been processed. The payment was subsequently reversed several hours later.
According to an internal review of the incident, as well as sources cited by the Financial Times, no funds actually left Citigroup. The bank reported the “near miss” only to the Federal Reserve and the Office of the Comptroller of the Currency (OCC).
A Citigroup spokesperson stated:
“Detective controls promptly identified the inputting error between two Citi ledger accounts and we reversed the entry.”
The bank further assured that its safeguards would have prevented any external transfers:
“While there was no impact to the bank or our client, the episode underscores our continued efforts to continue eliminating manual processes and automating controls.”
While this particular incident did not lead to an actual financial loss, it is part of a broader pattern of operational failings at Citigroup. The Financial Times revealed that the bank experienced 10 separate near misses involving $1 billion or more last year alone. Although this marked a slight improvement from 13 similar incidents the previous year, it suggests that significant risks remain.
These near misses do not have to be reported to regulators, leaving no comprehensive public data on how frequently such incidents occur across the banking sector. However, former regulators and risk managers indicate that near misses exceeding $1 billion are rare within the U.S. banking industry.
The recurrence of such incidents raises serious concerns about Citigroup’s internal controls and its ability to effectively manage risks at scale. The bank is still dealing with the repercussions of its 2020 error, when it mistakenly transferred $900 million to Revlon creditors—many of whom refused to return the funds. That mistake resulted in extensive litigation, regulatory fines, and the departure of then-CEO Michael Corbat.
Jane Fraser, who succeeded Corbat as Citigroup’s chief executive in 2021, has publicly stated that resolving the bank’s regulatory issues is her “top priority”. Despite these assurances, the institution was fined $136 million last year by both the OCC and the Federal Reserve for failing to correct problems related to risk control and data management.
