News-Antique.com - Jun 24,2008 - 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.