Massive $81 Trillion Error Exposes Citigroup’s Ongoing System Flaws
By SpringNewsNG, March 4, 2025
Citigroup made a costly mistake when a payment of $81 trillion was mistakenly credited to a client’s account instead of the intended $280, a blunder that could impact the bank’s efforts to convince regulators it has addressed its persistent operational flaws. The incident, which took place last April, had not been publicly disclosed until a report by the Financial Times revealed the details over the weekend.
The error occurred during an internal transfer when both a payments employee and a second official tasked with verifying the transaction failed to catch the mistake before it was processed. A third employee discovered the issue about 90 minutes after the payment had been posted, recognizing discrepancies in the bank’s account balances. The transaction was reversed several hours later, according to an internal account and sources familiar with the situation.
Fortunately, no actual funds left Citigroup, which informed both the Federal Reserve and the Office of the Comptroller of the Currency about the incident. The bank explained that its “detective controls” had quickly identified the error, and the payment was reversed before funds could be disbursed. Citi emphasized that the event underscored its efforts to reduce manual processes and enhance automation controls.
While no harm came to the bank or its client, the mistake highlights Citigroup’s ongoing struggles with operational issues. In fact, the bank reported 10 near misses involving erroneous payments of $1 billion or more last year. Though this was an improvement from 13 incidents in the previous year, the errors raise questions about the bank’s internal controls. Citi declined to comment further on these incidents.
Near misses, such as this one, do not require reporting to regulators, so there is no public data on the frequency of such errors across the banking sector. However, experts note that near misses of this magnitude are rare within the industry.
The recent error at Citi mirrors previous operational failures, notably the 2020 mishandling of a $900 million payment to creditors involved in a legal dispute over Revlon’s debt. The Revlon incident led to the firing of then-CEO Michael Corbat, hefty fines, and regulatory orders for the bank to address its issues. Jane Fraser, who took over as Citi’s CEO in 2021, has prioritized the resolution of these problems, although the bank was fined $136 million last year for continuing shortcomings in risk management and data handling.
The $81 trillion mistake in April was attributed to a user input error and complications with a backup system that had an inefficient interface. The issue began when a set of four transactions, totaling $280, was blocked in mid-March due to potential sanction violations. Although the payments were cleared quickly, they remained stuck in the bank’s system. Employees had to manually input the transactions into a backup screen, which contained a field pre-populated with 15 zeros—a mistake that went unnoticed by the processing employee.
This latest error further underscores the challenges Citigroup faces in overhauling its operational processes and meeting regulatory standards.
