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.