The Central Bank has fined Citibank Europe €1.33m and reprimanded it for six breaches of the Code of Practice on Lending to Related Parties after it said it had fallen far short of expectations.
Citibank Europe, which operates branches across Eastern Europe from its Dublin headquarters, admitted the breaches.
This code of practice requires banks to have the proper systems, controls, independent oversight and regulatory reporting processes in place to support their related party lending.
The banks are required to get board approval before entering into or varying loan transactions with related parties including directors, senior managers, significant shareholders of the firm and other connected parties.
It also requires banks and other credit institutions to introduce measures for reporting internally and to the Central Bank within specified timeframes.
The Central Bank said that Citibank breached certain provisions of the code from its introduction in January 2011 to 14 September 2016.
The breaches varied in duration – the shortest lasted one year and five months and the longest lasted for four years and six months.
However, the Central Bank said its investigation found no evidence that loans were granted to a related party on more favourable terms than loans to a non-related party.
It also said that Citibank has taken the necessary steps to rectify the deficiencies that gave rise to the breaches.
According to the Central Bank, Citibank failed to have the necessary policies and processes in place to give effect to the code, while it also failed to report certain related party exposures to the Central Bank.