Citigroup erroneously credited client account with US$81 trillion in 'near miss'

Citigroup Inc. credited a client’s account with US$81 trillion when it meant to send only US$280, an error that could hinder the bank’s attempt to persuade regulators that it has fixed long-standing operational issues.

The erroneous internal transfer, which occurred last April and has not been previously reported, was missed by both a payments employee and a second official assigned to check the transaction before it was approved to be processed at the start of business the following day.

A third employee detected a problem with the bank’s account balances, catching the payment 90 minutes after it was posted. The payment was reversed several hours later, according to an internal account of the event seen by the Financial Times and two people familiar with the event.

No funds left Citi, which disclosed the “near miss” to the United States Federal Reserve and Office of the Comptroller of the Currency, according to another person with knowledge of the matter.

The bank said its “detective controls promptly identified the inputting error between two Citi ledger accounts and we reversed the entry” and that these mechanisms “would have also stopped any funds leaving the bank”.

It added: “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.”

A total of 10 near misses — incidents when a bank processes the wrong amount but is ultimately able to recover the funds — of US$1 billion or greater occurred at Citi last year, according to an internal report seen by the FT. The figure was down slightly from 13 the previous year. Citi declined to comment on this broader set of events.

Near misses do not need to be reported to