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itibank said the Malinda Dee case was unacceptable “fraudulent action” in a letter issued after the central bank announced it was imposing a set of sanctions on the bank.

The emailed letter was issued Friday evening after Bank Indonesia (BI) slapped lengthy bans on Citibank’s credit card and wealth management businesses.

“We can assure that this suspension does not affect our customer services. We are committed to
fully [cooperating] with Bank Indonesia and [taking] all necessary action in consultation with the regulators,” Citi country officer for Indonesia Shariq Mukhtar said in the letter.

The sanctions come amid investigations by the National Police into both the death of Citibank
credit card client Irzen Octa following questioning by debt collectors, and alleged embezzlement in the bank’s wealth management business by senior relationship manager Inong Malinda Dee, who has been arrested.

“Citibank regrets two recent incidents involving the tragic passing of a credit card customer, as well as the unacceptable fraudulent actions of a former employee. We convey deep condolences to the families left behind,” Mukhtar said.

BI on Friday announced it was imposing several sanctions on Citibank: barring the bank from acquiring new clients for its wealth management business for one year, and barring it from
issuing credit cards for new customers for two years. It also said Citibank was not allowed to use third-party debt collectors for two years or open new branch offices for one year.

The central bank will also conduct fit-and-proper tests for the next 40 days for Citibank executives starting this week to determine their capability in running the bank, during which they were advised to not leave Indonesia.

If the police investigation concludes that crimes were committed in either case, the central bank could impose other sanctions on the bank, including revoking the bank’s business operating license, BI deputy governor Budi Rochadi said.

The central bank’s move received widespread praise from observers, economists, legal experts and lawmakers at the House of Representatives, who recommended BI impose heavy sanctions on Citibank.

“I appreciate Bank Indonesia for imposing harsh and tough sanctions on Citibank. I hope it will act as a deterrent [to other banks],” University of Indonesia economist Faisal Basri posted on Twitter on Saturday.

“The penalties seem harsh but there could also be an element of criminal liability. Banks do need
to be concerned with the agents that they engage and the message they use in carrying out their
services,” Wilson Ang, a dispute resolution lawyer at Norton Rose in Singapore, was quoted as saying by Reuters.

The House’s Commission XI overseeing financial affairs also welcomed BI’s move, saying it would summon central bank officials again to follow up on the matter, commission vice chairman Harry Azhar Azis said Saturday.

Commission member Arif Budimanta said that although the sanctions were temporary, they were “pretty harsh” and would hurt Citibank’s reputation. “The Malinda Dee case and the death of a customer showed weaknesses in the bank’s internal controls. The Citibank sanctions will serve as a warning and deterrent to [other players in the] banking industry.”