Sanctions on Citibank Indonesia

Today I received an e-mail from Citibank Indonesia explaining about the sanctions that the Indonesian banking regulator i.e. Bank Indonesia, has imposed on said bank for violations of internal bank regulations and risk management as well as weaknesses in its internal control and operating procedures.

In connection with the two ongoing scandals, one surrounding suspicions of embezzlement by its former Senior Manager and the other involving the death of a credit card customer, Citibank promised that it will it do its best to follow all the laws and regulations in Indonesia, like it has done for so many years.

Earlier I read on The Jakarta Globe that the sanctions were a two-year freeze on new credit card customers for Citibank Indonesia, a ban on acquiring new priority banking customers for one year and a one-year moratorium on opening new branch offices.

I hope that the above sanctions would not stop the Investigations that are now being carried out by the Police on the possibility of Money Laundering and the Murder cases by officials of Citibank Indonesia.

Citibank, Malinda, Money Laundering

Inong Malinda Dee (47), former Senior Manager of Citibank Indonesia who handled customers with a minimum account of Rp 500 Million, has been named by the Police as a suspect in the embezzlement of Rp 17 Billion of the bank's customers' money.

Republika quoted her lawyer Indra Sahnun Lubis as saying that Malinda has admitted about the customer's money laundering. He also said that Malinda's ex bosses in the bank knew about this practice since 10 years ago.  

Asian News Network reported that the Financial Transaction Reports and Analysis Center (PPATK) has launched an investigation of the Money Laundering allegations on 18 April 2011 and found indications that the customers include Police Generals, local administration leaders and their families. 

However, the Police has repeatedly denied that any of its officers had Citibank accounts.

PPATK's investigation would determine if Citibank exercised due diligence in opening accounts for “politically exposed” customers, such as public officials who might be more likely to engage in money laundering. 

The Jakarta Globe reported that  the Police has alleged Malinda of laundering at least Rp 2 Billion through PT. Sarwahita Global Management, a company that she partially owned.
Due to this allegation, Air Vice Marshall Rio Mendung, a Commissioner of PT Sarwahita, was removed from his position as Deputy Chairman of the National Defence Institute (Lemhanas).

I hope that investigations by the Police and PPATK would reveal the truth about this case.

Citibank and the Murder of a Cardholder

Beside facing an embezzlement of prime customers funds by its Senior Manager, U.S based bank Citibank is facing a very serious criminal charges i.e. the torture to death of  a credit card holder by its debt collector.

The tragedy happened on 29 March when a holder of Citibank credit card i.e. Irzen Octa, Secretary General of United Nation Party, came to the bank's office at Menara Jamsostek, South Jakarta, to complain about the incredible sudden increase on his card bill from Rp 48 Million to Rp 100 Million.

Unable to handle the complain properly, an officer of the bank and two outsourced debt collectors took Irzen to the bank's room at the fifth floor of the building and brutally beat him to death.

The Jakarta Post quoted a Police officer as saying that traces of blood were found on the curtains and walls
and an autopsy performed on Irzen showed he suffered damage to his brain.

The Citibank officer and the two debt collectors were arrested and named suspects in the murder case and could be charged with Battery and Torture based on the Criminal Law, which carries a maximum jail sentence of five-and-a-half years.

Citibank PR officer Ditta Amahorseya refused to comment on the Police investigation but said that Citibank had and obeyed a strict code of ethics in regards to debt collection.

It is very sad to know that a big and famous U.S based bank like Citibank could ever use violent loving gang of thugs to handling the bank's customers, instead of legal proceedings. I hope that the government, especially Bank Indonesia as central bank, and law enforcement agencies would take serious actions, so that other banks would not use violence anymore.