Citibank became the public spotlight, related to two big cases they involved. First, the embezzlement of customer funds by their former manager, Inong Malinda Dee. The second case is the death of Irzen Octa, the Citibank credit card customer, who was killed while taking care of the stalled credit at Social Security Branch of Citibank Tower, Jakarta. The death of Irzen Octa involved the debt collector services company as third party, which is use to collect the bad debts from customers. This debt collector practices done by almost bank that issuing credit cards.
Bank Indonesia has firmly stated that Citibank has done violations of criminal conduct banking. Private banking practices that Citibank did, it also done by 22 other banks in Indonesia. The latest case is about embezzlement of Elnusa deposits worth Rp 111 billion in Mega Bank. Bank Indonesia already had frozen private banking practices at 23 banks, including Citibank.
Private banking service and the explosion of credit card problems are just some effects of competition. As a result, banks began to ignore the principle of banking. The cases that occurred recently indicate there is something wrong in the banking practice, both procedures and human resources .At present, Bank Indonesia is doing further tests to evaluate the bank's internal controls related to the practice of using debt collectors to collect bad debts from customers.
Bank Indonesia has set strict billing regulation in Circular Letter No. 11/10 in 2009, where services can be done if the billing credit card arrears have been classified as doubtful or loss category. In addition, Damien, as spokesperson of Bank Indonesia said the debt collector may not use the practice of violence. If violence is done by a third party, the responsibility is on the credit card issuer. Therefore, the central bank must decide the sanctions for Citibank carefully and fairly. Wrong decision could undermine public confidence in the banking sector. More important, that sanctions must also encourage improvements in systems and procedures of all banks in Indonesia.
Bank Indonesia has given 3 sanctions for Citibank, and these sanctions are possible to grow over time during the investigation. First, Bank Indonesia has been prohibited Citibank to process new credit card applications for 2 years. Moreover, Citibank also prohibited using debt collector’s service for 2 years. The last is Bank Indonesia freeze new Citigold service applications, priority banking, for one years.
Furthermore, there are some issues that must be faced by all banks that operate in Indonesia.
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
After being seized, CenTrust sold its deposits in June 1990, to Great Western Financial Corp., Beverly Hills, California. Mr. Paul, the former chairman and CEO of the failed CenTrust Savings Bank of Miami, was sentenced to 11 years in federal prison after being convicted in a jury trial of 68 fraud-related counts in US District Court in Miami involving the spectacular collapse of CenTrust at a cost of $1.7 billion to taxpayers, and for allegedly helping arrange the sham purchase of $25 million in CenTrust securities by Bank of Credit & Commerce International. The verdict followed a six-week trial. In all felony counts, most involving allegations that he siphoned $3.2 million from CenTrust and spent it on his 95-foot yacht, his homes in Miami, his luxuries, and elsewhere during the 1980s.
On August 12, 1998, Citibank took full ownership and control of the medium-sized Mexican banking group, Confía, dropping the latter's name and logo from the 280 branches throughout Mexico, and from that point on operating it as part of Citibank Mexico. The road that led to this outcome was rocky to say the least, and the fit of the Mexican bank into Citicorp's global organization and strategy was quite different from what would have been expected only months earlier. This discussion describes the sequence of events involved and the ways in which the process was linked to the organizations and people involved. Before starting into the banks' situations and characteristics, an orientation to the time and place is useful.
García, J. A. X. E., Zeldin, C., & Lardner, J. (2010). The Credit Card Industry Burdens Borrowers with Unfair Interest Rates and Hidden Fees. In J. Tardiff (Ed.), Current Controversies. Consumer Debt. Detroit: Greenhaven Press. (Reprinted from Gotcha!, Up To Our Eyeballs: How Shady Lenders and Failed Economic Policies Are Drowning Americans in Debt, pp. 37-53, 2008, New York, NY: The New Press) Retrieved from http://ic.galegroup.com.rproxy.iwcc.edu
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
...: A Critique of the Global Credit Card Society." International Journal of Comparative Sociology 38:1 June 1997, 77-82.
The industry is composed by a continuum of banks which produce a homogenous product — banking service. Domestic as well as foreign competition is violent. Not to forget the fact that ICBC has not been the first bank to embrace internet banking. So, it is all the more reason which places the bank in the most precarious position to continuously shield it self from the volleying competition.
The bank failure in Jamaica illustrates how negative mindsets and behaviors can devastate the financial system and disrupt economic growth. The primary role of any bank is to safeguard its customer’s money, offer interest rate on deposits, lend money to creditworthy individuals, and make sound investment decisions to maximize shareholder value. Because of rapid economic growth between the late 1980s and early 1990s in Jamaica, the Central National Bank (CNB) and Worker’s Savings and Loans Bank (WSLB) loosened their monetary policies, provided preferential interest rates and extended credit beyond what was reasonable to members of its own board of directors, managing directors, and officers of the bank. These actions posed significant risks to the bank and its future.
During this problem happen, there were 100 million transaction is being effected. The deleted information is reenter back to the bank computer system. This problem is take time to solve it. Because of this problem, the bank is promises to all the customer that being effected by this problem that they will reimburse the fires and the late payment f...
(6)In order to ensure safety of company property, the company bank account should be monitored by someone out of the account payable department. However, in this system, there is no such person who could reconcile the account. As a result, it is difficult to measure whether the payment is equal to the value of purchased good. On top of that, treasurers and account payable clerks can hardly be controlled. The owner of this business is recommended to find some trusted and reliable accountants as supervisors of the company bank account. And the company should also design a system which requires the authorised fingerprint for each payment. This can maximize the protection of the company's property.
...e of the challenges that the Grameen Bank has faced in the last years is that the government believed that citizens from Bangladesh are just growing a big dept that will only damage their lives in the future. However, as stated before, 98% of the loans have been repaid.
Lastly the challenges faced by the Islamic banking is the lack of unity in giving Shariah’s view. Therefor, it gives problem to the agencies as there are different methodologies that are being proposed when elaborating the law. In order to counter this challenges, agencies need to take initiatives of choosing the view which is parallel or nearly parallel with what was underlined by the Al-Quran and As- Sunnah.
Deposit slip issue, online fund transfer slip issues, statement issue and entering the balancing inquiry of the customers.
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.