On 11th August 2020, three employees working for Citigroup Inc confessed to a federal judge that they made errors in processing an interest payment.
This had resulted in the mistaken transfer of $900 million to Revlon Inc. lenders.
Moreover, two of those employees are from India who worked with Wipro Technologies, the Indian technology partner of Citi.
The incident billed as the biggest blunder in banking history went on to make global headlines.
Citigroup is back under the scanner after losing a legal battle in the US to recover the money accidentally transferred.
At the heart of the breakdown was a system known inside the bank as the “six eyes” approval process.
Under the six-eye protocol, at least three people must approve large sums of money transfers to avoid any misstatement.
In the first step, an employee manually puts payment information into the bank’s Flexcube loan processing program.
Citigroup relies on the outside technology firm Wipro Ltd for most part of the process.
The second step also typically involves a Wipro employee, who serves as a “checker” on the maker’s work.
However, the final step requires a team of Citigroup employees serving as the “approver” for final check on the payment.
Further, the magnitude of this human error is swiftly turning the attention to Wipro’s damaging role in the gaffe.
The alliance between Citibank and Wipro dates back to 2008 when Wipro bought Citi Technology Services for $127 million.
This deal assuredly wiped a $500 million of business for six years.
The $900 million blunder can potentially derail a profitable business and cast a shadow on similar business arrangements.
It can further create a credibility issue for Indian IT firms according to analysts.
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