FSA mulls slap for Citibank unit over inappropriate sales

The Financial Services Agency is considering punishing Citibank N.A.’s Japanese unit over suspected inappropriate sales of financial products to high-income customers, sources familiar with the situation said Saturday.

The financial watchdog suspects the Japanese unit may have sold products whose sales are not allowed under the Banking Law, the sources said.

The FSA may order Citibank to suspend some of its Japanese operations, including private banking services for wealthy customers, the sources said.

The agency will likely decide on specific administrative measures by the end of the month, they said.

In June, the agency ordered the Japanese branch to strengthen its control over customer data following revelations it lost backup data on transactions.

Citibank was the first bank to offer American-style private banking services to Japanese clients. Mainly tapping individual customers in the upper-income group, it is now widely seen as the most successful foreign-affiliated bank in the private banking business in Japan.