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Rs 400 crore Fraud in Citibank Consumer Banking Division

Citibank is probing a Rs 400 crore fraud perpetrated by certain employees of the bank at its Gurgaon branch in India. Citi BanksAsia Pacific fraud risk management team has been camping in India for the past two weeks conducting detailed investigations and questioning several employees who maybe suspected of being involved in prosecuting the fraud.

Employees involved have been suspected of selling investment products to clients claiming that these would generate unusually high returns. The employees claimed that the products were authorized by the banks investment product committee and used forged bank documents and letterheads to prove the same.

The suspected employees then siphoned off the funds raised from the sale of these products into their personal bank accounts and defrauded clients to the tune of Rs. 400 crore.

The suspected employees had access to High Net Worth Individual (HNI) clients of the bank and were in roles which involved servicing their requirements for investment products, according to a bank employee who spoke on condition of anonymity.

It is leant that close to 40 clients have been impacted by the fraud though the number could be much higher as investigations are still underway.

The fraud may have been discovered by accident according to some of the people quoted above. According to one of the sources, a senior official in the consumer banking division was talking to a client who mentioned that he had recently purchased a product from the bank that could generate unusually high returns in a short span of time.

It was brought to the clients notice that the bank was not distributing any such product which is when an investigation into the matter was initiated. The investigation may have triggered audits across several branches of Citibank in India according to another bank official.

Sources by ET

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One comment

  1. the funds embezzlement is all because of weak internal controls, that banks have in today's world. The management is not interested in investing on manpower, instead focusing to extract as much as they can from the employees. these type of fraud are occuring in most part of Asia. as the employee tries to retain the customer by giving him incentive which also has his own personal gains.

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