Citibank not allowed to recover $500 million it transferred by mistake

Manhattan: Citibank is struggling to recover $500 million which it had transferred to the lenders of a cosmetic company Revlon in August 2020.

After a detailed hearing, a court has ruled that the bank will not be allowed to recover the amount. It also termed it as the biggest blunder in banking history, Money Control reported.

What actually happened?

Last year, Citibank which acts as a loan agent of Revlon had mistakenly transferred the principal amount i.e., $900 million to the cosmetic company’s lenders instead of interest amount.

Soon after realizing the mistake, the bank started attempting to recover it. However, the bank is yet to recover $500 million.

Court’s ruling

When the matter reached a US District Court, Judge Jesse M. Furman ruled that the bank cannot recover the amount as the recipients believed that the payments were for the entire Revlon loan.

After the court’s judgment, Citibank is planning to file an appeal in the case.

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