Why is Wipro Being Held Answerable for Citibank's $900 Million Blunder?

·2-min read

Citibank’s “biggest ever banking blunder” now has Indian IT firm, Wipro, in the spotlight, according to an exclusive report by Moneycontrol.

The report by Moneycontrol’s Dinesh Unnikrishnan and Chandra R Srikanth states that the global banking major relies on a so-called “six eyes” protocol for high-value transactions. In order to ensure extra precaution, at least three people must sign off for large sums of money to be transferred. In this case, two happened to be from India, working with Wipro Technologies.

As reported earlier, Citi Bank had mistakenly wired Revlon’s lenders around USD 900 million. To top that, Citibank also lost a US-based legal battle to recover the money.

Wipro did not respond to emailed queries from Moneycontrol.

Citibank in an emailed response to Moneycontrol said, “As a result of a review undertaken last year (2019), we are in the process of upgrading our loan operations platform. We take pride in the role that we play as a global leader in financial services and recognize that an operational error of this nature is unacceptable. We have put significant, additional controls in place until the new system is operational.”

“While many lenders have recognized the payment was in error and returned several hundred million dollars so far, other lenders have either refused to return or have not committed to return the funds. Those funds have been frozen by court order. We believe the law is on our side and that we will recover the outstanding funds,” said the bank in the email response.

Wipro in 2008 had bought Citi Technology Services, the India-based captive provider of IT services and solutions to Citigroup entities worldwide.

Again, in 2010, Wipro took over and Citibank operation and management of Citi’s data centre at Meerbusch in Germany.