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Citibank Korea warned for irregular lending

87 staff recklessly accessed customer information: FSS

The Financial Supervisory Service said Tuesday that it has fined Citibank Korea 169 million won ($153,600) for engaging in irregular deals with its affiliates.

The state regulator also issued an institutional “warning” against the bank for breaching the law on the intra-group credit offering and glossing over employees’ unauthorized access to customers’ personal information.

In addition, 44 employees were subject to disciplinary measures including suspension of duties.

The U.S. Citigroup’s Korean unit extended illicit loans to two of its sister companies and parent holding firm, according to officials at the Financial Supervisory Service.

In violation of stipulations on the intra-group deal, the commercial bank extended loans worth 70.5 billion won to Citi Credit Service and Citi Financial Sales Korea “without securing appropriate collateral.”

While the rules ban a financial service firm from issuing loans to its parent financial holding firm, it had granted loans totaling 3.2 billion won to Citigroup Korea Inc.

FSS inspectors also revealed that the bank’s 87 employees had unauthorized access to customers’ personal information 3,280 times.

Further, a banker was found to have opened 147 accounts “under borrowed names.”

The sanction on Citibank Korea was fine-tuned at a recent meeting of senior regulatory officials from the FSS and the decision-maker Financial Services Commission.

In March, the FSS took punitive action involving a warning against the bank for irregular lending terms in sales of financial products.

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