Dion Bisara – In an unprecedented move, the central bank has barred Citibank Indonesia from acquiring new credit card customers for two years, priority banking customers for one year and opening any new branches for a year.

The controversial bank at the center of two ongoing scandals has also been banned from using third-party debt-collection services for two years. Citibank country manager Syarik Mochtar and other executives will also be forced to undergo fit-and-proper tests.

In March, former Citibank relationship manager Inong Malinda Dee was accused of embezzling millions of dollars from wealthy clients, closely followed by the death of politician Irzen Octa, who allegedly died after being confronted by debt collectors.

Bank Indonesia deputy governor Budi Rochadi, speaking at a press conference in Jakarta on Friday, said at special investigation of the bank and concluded that "violations" of Citibank's internal regulations and risk management had occurred.

"There were also weaknesses of the standard operating procedures and internal controls," Budi said. He said the sanctions were effective immediately, though Citibank could continue to serve its existing clients.

As well as forcing the bank's senior employees to undergo fit-and-proper tests, any staff implicated in the offending or lack of oversight should be fired, he said.

Budi said the sanctions could be more severe, depended on the results of police and Financial Transaction Reports Analysis Center (PPATK) investigations.

Bank Indonesian Deputy Governor Halim Alamsyah said the action was "part of the central bank's effort to ensure protection for Indonesia banking customers." "We also hope that with these steps, other banks will also be able to improve their operations," he said.

Budi said the central bank has previously imposed punishments on a number of banks but this is the first time the action has been announced publicly.