Citibank acting as a loan agent to cosmetic company Revlon, accidentally transferred USD 900 million (about Rs 6,554 crore) to the company’s lenders.
Citi was serving as the so-called administrative agent between Revlon, the embattled cosmetics company, and its creditors. It mistakenly paid those lenders much more — USD 8 million was the correct amount— than it intended to.
A worried Citibank then moved the court demanding a full refund but it still has not received $USD 00 million from the accidental transfer. A US District Court judge ruled that Citi can’t recover that amount. It said, “it is one of the biggest blunders in banking history.” This is a unique case involving a corporate client.
Here’s an estimation on what lies ahead.
Can such a huge amount of money reach the wrong beneficiary?
It shouldn’t happen in a normal scenario. Banks have stringent procedures to make sure that a fund transfer is approved by the sender and the recipient details are submitted promptly.
