In one of the biggest blunders in banking history, Citibank has lost nearly USD 500 million for a wrong transaction it did to a cosmetic company. As per a US Court ruling, Citibank won’t be allowed to recover almost around USD 500 million it mistakenly paid to cosmetic company Revlon’s lenders. The judgment called the debacle “one of the biggest blunders in banking history”.
Recipients of money wired in error are typically required to return it. But in this case, the creditors had reasonable grounds to believe the payment was intentional, Judge Jesse M Furman of the US District Court in Manhattan wrote in his ruling.
Because defendants in the case believed “in good faith and with ample justification” that the payments were for the full Revlon loan, “defendants’ clients are entitled to keep the money,” Furman said in a 105-page ruling.
What is the case?
In August 2020, Citigroup sent some USD 500 million to 10 financial companies who were parties to a term loan…
