Indonesia's central bank on Friday sanctioned Citibank Indonesia
Bank Indonesia, the country's banking regulator, also banned the U.S. lender from getting new wealthy customers for its premium Citigold service or opening new offices for one year, effective from Friday.
Bank Indonesia has found violations on international banking regulations as well as weakness in risk management, said S. Budi Rochadi, a deputy governor of Bank Indonesia at a news conference.
The central bank is taking the measures as an effort to protect customers and the credibility of the banking industry.
Citibank Indonesia was not immediately available for comment.
Citi, one of the leading onshore wealth managers in Indonesia together with UBS
The central bank had already suspended Citibank Indonesia from recruiting new customers to its Citigold premium service as police investigate the suspected embezzlement at its wealth management unit.
Bank Indonesia said if the police investigation shows Citibank Indonesia committed crimes, it will revoke its operating license in the country, a growing market for international banks.
Last week Indonesia's central bank also asked 23 banks to stop seeking wealthy new customers for a month.
The wider move, which came into effect from May 2, could prove a short-term setback to a buoyant private banking industry seeking to tap wealthy Indonesians.
(Reporting by Adriana Nina Kusuma; Editing by Neil Chatterjee)