BI penalizes Citibank severely

Jakarta Forum-ANTARA News - Bank Indonesia has given Citibank severe punishment for the violations the bank had committed in the case of Citigold premium service management and the use of a third party in dealing with credit card problems, Budi Rochadi said.

The deputy governor of Bank Indonesia said here on Friday sanctions that had been given to the bank include bans for the bank to receive or acquire new Citigold customers for a year, to issue credit cards for new customers for two years and to use credit card debt collectors for two years.

Budi said the sanctions were part of BI`s measures to protect customers` interests and the credibility of the banking industry.

He said BI had conducted a special investigation to ascertain that violations had really been made, namely violations of internal regulations as well as weaknesses in the implementation of risk management.

He said the sanctions were effective May 6 and they could be increased if bigger violations were later found.

Budi said BI would carry out a fit and proper test on the bank`s executives and management "including Sharikh Mochtar who is Citibank`s resident chief in Indonesia."

He said BI had also ordered the bank to suspend those executives who were involved in the Citigold and credit card cases after the completion of the fit and proper test.

"BI has also instructed Citibank to fire lower officials involved directly in the priority service and credit card cases. We have also asked the executive officials not to leave Indonesia," he said.

BI, he said, has also instructed the bank to improve its risk management and internal control, take improvement steps in line with the results of BI`s investigation, the result of which should later be submitted to BI immediately.

"BI has instructed Citibank not to open a new office within a year as of May 6. Any kind of office," he said.

He said BI had also asked the central office of Citibank in New York to totally evaluate the Jakarta Citibank`s internal control system. (*)
Editor: B Kunto Wibisono Source: Antara News

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