Citigroup’s China expansion plan put on hold by US regulators, Bloomberg News reports By Reuters

(Reuters) – Citigroup Inc.’s plan to expand into China has hit a snag with U.S. regulators after the Federal Reserve sanctioned the bank over its data management and risk controls, Bloomberg News reported on Sunday.

The bank is facing delays in setting up an independent securities firm because it has yet to receive a letter of approval from the US Federal Reserve to verify its regulatory status, which is required by Chinese authorities, according to Bloomberg.

The report said Citi has been instructed to address data management issues internally after it was fined a total of $136 million in July, making it more difficult to meet licensing rules in China.

The New York-based bank is continuing discussions with China’s securities regulator to set up the company, and has no plans to withdraw its application, Bloomberg reported, citing people familiar with the matter, adding that the situation is fluid and could change.

Citigroup did not immediately respond to a Reuters request for comment.