India investigates Citibank staff over alleged fraud

09:13, December 30, 2010      

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Indian police said Wednesday that they were investigating Citibank staff in Gurgaon, a booming satellite city outside New Delhi, over a multi-million-dollar scam targeting wealthy clients.

Employees at the bank in Gurgaon allegedly forged letters to sell a fake investment scheme to about 40 wealthy clients, the Economic Times newspaper reported.

Nearly 4 billion rupees ($88 million) were handed over, according to the paper.

Indian Finance Minister Pranab Mukherjee Wednesday ruled out any systemic failure in the alleged fraud at Citibank and said "regular precautions are being taken," according to the paper.

The alleged fraud came to light earlier this month when one of the clients mentioned the scheme to a senior bank manager.

Police confirmed the probe but gave no further details.

Citibank said in a statement that it was inspecting suspicious transactions.

"We immediately reported the matter to all the relevant regulatory and law enforcement authorities," it said. "Identified suspicious transactions have been isolated, and we are providing full assistance to the authorities in their investigations."

Media reports said that a wanted employee was on the run.

The allegations are the latest financial scandal to hit India.

Last month, several senior executives of state-run banks and an insurer in Mumbai were arrested over bribes totaling more than $200 million paid to sanction loans to property developers.

Source: Global Times
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