One of the World's largest Bank is again headed in trouble and this time in India.
This should be an eye opener for all businesses who are having Citibank Account and dealing with Inward International Transfers. In this particular matter, Citibank assured a very low commission rate to win Corporate business and in real banking transactions when they happened, they charged higher commissions without any prior consent from business. An application to register F.I.R against Citibank under section 420, 120b, 406 Criminal Procedure Code was submitted at Navrangpura, Ahmedabad police station on 21 June 2008 at 8:45 PM Indian Standard Time.
This incident happened with Gloscon Solutions Pvt Limited, a 100% EoU, an Open Source Web 2.0 Software Development firm and and a global leader in Drupal CMS implementation.
Citibank Ahmedabad Team, Head Office in Chennai and their Grievance Cell have not cooperated in this matter to provide right answers. It is notworthy that while Grievance cell was absolutely non-functional and did not act, Citibank Ahmedabad office changed 3 Relationship Managers(Mr. Himanshu Mehta, Mr. Biju Thomas, Mr. Yogesh Mehta) in span of 20 days in this matter. The newest manager Mr. Yogesh Mehta approached Gloscon Solutions Pvt Limited on 18th June 2008 and even suggested to forget the matter and look towards future while this appears to be a multi crore scam by Citibank. Himanshu Mehta, the first relationship manager on his 23rd May 2008 visit to Gloscon revealed that "Citibank system has technical glitch". World's largest bank having a technical a glitch that could be costing businesses millions?. Keeping the business customers in dark, Citibank has been ripping off its customers by charging higher commissions and not providing transparency whatsoever on this.
Gloscon Solutions Pvt Limited is an 100% EoU in Software Services business since last 1 year with its development center in Ahmedabad. Company is leading provider of Open Source Web 2.0 solutions to international clients and is also building nearly 40 web properties. Gloscon holds a current account (Gold Customer) in Citibank N.A. Ahmedabad since November 2007.
Citibank's initial relationship manager Mr. Himanshu Mehta promised the best competitive rates of 5 paisa commission from the IBR(Inter-bank rate) on every transaction during the account opening. IBR rates are determined by market forces and fluctuate day to day and by the second. This means that on any Inward remittance that gets converted to Indian rupees, Citibank is supposed to take 5 paisa commission deduction from that instance's IBR rate per every inward dollar and transfer the rest in Gloscon's Current account. E.g if $100 was transferred to Gloscon Indian Rupee account(assuming there are no other charges for sake of simplicity), and if IBR Rate at the time of conversion from $ to Rupee was Rs.40, Citibank would deduct 5 paisa per dollar and remit Gloscon current account at rate of Rs. 39.95 for every dollar. In this case, this would be Rs. 3995 credited to Gloscon's bank account. This is what should have happened legally.
It is important to note that when a remittance is done, Citibank just provides you instructions that $X was converted to your rupees at Rs. Y.nn rate. They do not provide you the time and IBR rate when conversion is done. This is where Citibank cheats as there is generally a significant fluctuation in daily IBR rates.
The matter came to light when Standard Chartered Bank(SCB) executives approached Gloscon Solutions Pvt Limited to lure the business and promised 4 paisa rate. Gloscon had recently got inward remittance of $60, 000 via Citibank on 2nd May 2008. So just out of curiosity, SCB bank executive was asked what would company get in account if same transaction was done with SCB compared to that which already had happened in Citibank. SCB calculations showed that Gloscon would be getting much higher amount in Bank Account if Gloscon had done transaction through them. The difference was huge – approx Rs. 21, 000 less in Gloscon account under Citibank transaction. If there was only 1 paisa variation between Citibank and SCB rates and for a transaction of $60, 000 – the difference should be Rs. 600 and not Rs. 21000.
Being concerned with the huge difference between the credited amount in Gloscon account at 5 paisa commission spead committed by Citibank against what SCB said Gloscon would have got at 4 paise deduction with SCB, Gloscon Managing Director, Mr. Roshan Shah spoke on phone with Mr. Himanshu Mehta of Citibank and sent him number of follow up emails to clarify the matter and provide the IBR rate for 2nd May 2008 as well as the time the transaction happened.
Finally, Mr. Himanshu Mehta made a in person visit to Gloscon Office on 23rd May and informed that the commission rate that was applied on all transactions was 15 paisa and not 5 paisa. Listen to the audio clip here. He even confirmed that all the past Inward international cheque remittance transactions in Gloscon Account were all done at 15 paisa commission spread. Ths was again done verbally.
In the same Mr. Mehta informed that Citibank System has a system glitch and he had written about the same to Corporate office via internal communication and he couldn't share that conversation. Listen to the audio clip here. This means that the system is unable to record the commission spread properly. Mr. Mehta was unaware that this conversation was being recorded.
Mr. Mehta clarified that that the IBR rate when 2nd May transaction was done was Rs. 40.64 while Gloscon got the remittance at the rate of Rs. 40.37. This was still 12 paisa more commission charged because 40.64 - 40.37 =27 paisa (and not 15 paisa). Mr. Mehta promised that Citibank would refund this amount. Gloscon Managing Director Mr. Shah requested Himanshu to put all this in writing.
On 27th May after phone reminders following up on previous conversation and few email reminders from Mr Shah to Citibank requesting to put things in writing, Mr. Himanshu Mehta provided details of 2nd May transaction of $60, 000 along with IBR rates for 2nd May. Mr. Mehta obviously had been doing his homework all along and also provided IBR Rates via email that mentions the IBR rates at High for that day 40.78 and low at 40.50. The Gloscon transaction of 2nd May was done at 40.37 which falls in this range with 15 paisa spread (40.37 + 0.15 = 40.52 which is slightly higher than 40.50 and hence legally valid). The time of transaction was not provided.
On 3rd May Mr. Shah along with other 4 Gloscon executives were at Citibank premises for their Board Meeting. Being a Gold Customer, Gloscon had a privilege to use Citibank Infrastructure for board meetings. In between the Board Meeting, Mr. Himanshu Mehta himself had said that there was an inward remittance yesterday and has hit the account. Mr. Shah clarified the rate with Mr. Himanshu Mehta and he said "You are only at 5 paisa spread - we offer the best rates" and Mr. Shah thanked him and continued witht he meeting.
On receiving 27th May email and going back to the conversation of 23rd May in Gloscon office and on 3rd May at Citibank Board meeting, Mr. Shah knew something was wrong and wanted to get to the root of it. One thing was clear that Mr. Himanshu Mehta did not keep his word of 5 paisa commission spread and the 15 paisa commission spread statement was made up. Why and what was going on? - was to be found.
Mr. Roshan Shah then sent email reminders asking Himanshu Mehta - the exact time when the 2nd May transaction was done and IBR rate at that time to be put on written record via email. While Mr. Shah already had the audio file of 23rd May in possession which Mr. Mehta was unaware of, Mr. Shah wanted to get everything clarifed in writing. Citibank did not provide this information. It is noteworthy here that Mr. Himanshu Mehta already knew that when the Gloscon Inward Remittance transaction of 2nd May was done, the IBR rate was 40.64. He has been witholding critical information till date from putting it in written form.
Based on just 1 transaction and with revelation of fact that Citibank had a system glitch, it was clear that Citibank system was a big mess that could bring out a larger issue in light. But giving benefit of doubt to Citibank, Gloscon wanted to validate whether this was just 1 transaction or this is a larger problem that could potentially be causing Gloscon and other businesses lot of financial losses. Number of requests were sent to Himanshu Mehta to provide the Transaction details of all previous transactions and IBR rates at that time.
Mr. Shah wrote to Citibank Grievance Department a number of times. Mr. Shah also escalated the matter via email to Citibank Head Office as well as officers listed on Citibank website for Grievance Redressal namely Ms. Anjana Makkar and Mr. Julio Ribeiro. None of them responded and not even the Chennai Head office bothered to make a single call to Gloscon Executives to explain the matter. Grievance Department kept sending different service ticket numbers on every email and V Mythili – Manager of Grievance Department kept pushing the matter back to Ahmedabad team asking Gloscon team to follow up with Ahmedabad team.
During this process the Relationship Managers changed from Himanshu Mehta to Biju Thomas to Yogesh Mehta and Gloscon Team had to explain the matter over to different people - again a waste of time. None of them was willing to help Gloscon in providing the details of previous transactions and time they happened along with IBR rate at that time.
After repeated follow ups, Mr. Yogesh Mehta, the third relationship Manager in 3 weeks made a visit to Gloscon office on 18th June. Yogesh requested to forget the past incidents and start a fresh relationship going forward. Mr. Shah insisted that he needed the past transaction and IBR details before he takes this relationship any further. Yogesh promised to furnish the details of all previous transactions in 2 days.
Yogesh delivered the printed copy of Transcation details and historical IBR rates on 21st June to Gloscon office. He however did not provide the details of the time when Transaction happened.
The result was not surprising at all to Mr. Shah. There were previous 4 Foreign Exchange transactions in Gloscon account since November not considering the transaction of 2nd May 2008. Result was shocking. None of these 4 transaction had even 15 paisa commissoin spread even considering that from the day's Lowest IBR rate. This proves the fact that Mr. Himanshu Mehta had cheated Gloscon and the 15 paise spread was never there and never promised. The fact is that only 5 paisa commisson deduction was promised(being a Gold Customer) and knowing the fact that 2nd May transaction for which Gloscon Executive Team continuously asked for details did not fall in the 5 paisa range, Mr. Himanshu purposefully misrepresented the rate at 15 paisa commission spread deduction which made the 2nd May 2008 transaction look legally valid.
Citibank Ahmedabad team of Himanshu Mehta, Biju Thomas and Yogesh Mehta never seemed to have intention to give 5 paisa spread and deceived Gloscon by false assurances. They are in business of cheating people. After Mr Himanshu Mehta promised to refund the difference amount during his office visit on 23rd May, Mr. Himanshu Mehta was again sent reminder by Mr. Dheeraj Dagliya – Director of Gloscon for refund amount on 2nd May transaction as well as all past transactions. There was no response in this matter and Citibank does seem to be gupling huge money this way. Himanshu later informed on phone that Mr. Biju Thomas was in charge and when Gloscon team tried to follow up, neither Biju nor Himanshu were reachable. Same was told to Mr. Yogesh Mehta on his visit on 18th June to refund the Money but he also said "Lets forget the past and lets form a new relationship"
Mr. Roshan Shah, submitted an application of criminal complaint under section 420, 120b, 406 of Criminal Procedure Code at Navrangpura Police Station against Citibank Head Office, Citibank Ahmedabad, Himanshu Mehta, Biju Thomas, Yogesh Mehta, V. Mythili, Anjana Makkar, Julio Ribeiro same day (21st June).
Obviously, it looks like Citibank has racked in millions and cheated many other clients across India. Citibank Acknowledged System issues, cheated the customer, promised refunds on difference but did not pay, Head office did not respond and they kept withholding information for a long time.
Citibank Head Office, Ahmedabad Office and all the persons above are accused for:
1. Breach of Trust
2. Jointly misrepresenting facts
3. Witholding and not sharing critical transaction details
4. Financial Fraud done despite aware of the fact that there was a system flaw and considering this if transactions were done manually, this would neve have happened. Citibank Executives purposelly committed this crime.
5. Not refunding the amounts that was wrongly and purposefully debited and Mr. Yogesh Mehta requesting to forget the past matter.
When you look closely at this issue, this probably would mean that many other companies would be ripped off by Citibank the same way!
-- source gujjuweb.com
Aug 14, 2020
Complaint marked as Resolved 
![Hongkong & Shanghai Banking Corporation [HSBC]](/thumb.php?bname=1&src=hsbc-bank.jpeg&wmax=182&hmax=300&quality=90&nocrop=1)
