Citibank Fined €1.3m By Central Bank For ‘Breaches Of Code Of Practice’
The Central Bank of Ireland (CBI) has fined Citibank €1.3m for six breaches of the Code of Practice on ‘Lending to Related Parties’.
Citibank has admitted the breaches.
The code requires credit institutions to have the proper systems, controls, independent oversight and regulatory reporting processes in place to support their related party lending.
Credit institutions are required to obtain prior approval of their board, or a subcommittee of the board, before entering into or varying loan transactions with related parties including directors, senior managers, significant shareholders of the firm, and other connected parties.
The code also requires credit institutions to introduce measures for reporting internally and to the CBI within specified timeframes.
The CBI’s investigation found that Citibank breached certain provisions of the code from its introduction in January 2011 to 14 September 2016.
The breaches varied in duration.
Citibank’s breaches include failure to have the necessary policies and processes in place to give effect to the code, failure to report certain related party exposures to the CBI, failure to report certain deviations from the requirements of the code to the CBI within prescribed time limits; and failure to obtain approval of its own related party lending committee prior to granting or varying certain loans to related parties.
Commenting on the fine, Seána Cunningham, the CBI’s director of enforcement and anti money laundering, said that the CBI’s investigation found that Citibank failed to put in place the necessary governance, policies and procedures to implement the regime until two years and 8 months after the code came into effect.
“Those deficiencies were followed by breaches of reporting and loan approval requirements. The breaches are admitted by the firm. Citibank has fallen far short of the Central Bank’s expectations in this regard, which is wholly unacceptable,” Ms Cunningham said.
“We require the boards and management of regulated entities to take their regulatory responsibilities seriously and to fully implement all applicable regulatory requirements.”
In a statement Citibank said that it was pleased to resolve the matter, which it initially informed the Central Bank of.
“It did not affect clients,” a spokesperson for the bank said.
Author: Ellie Donnelly
What would you do if you had a machine to catch a thief? If you were a corrupt Chinese bureaucrat, you would want to ditch it, of course. Resistance by government officials to a groundbreaking big data experiment is only one of many challenges as the Chinese...
The multipronged investigations into money laundering activities on a massive scale at Danske Bank’s Estonia branch (DBE) have triggered a landmark regulatory response from the European Union that is certain to have repercussions for banks in the EU and globally....
A yearlong inquiry into misconduct in Australia’s financial industry uncovered a litany of scandals, including charging for services that were never provided, forging loan documents, lying to regulators and pushing customers into bad investments to meet bonus...