Citibank Europe has been fined €1.3 million over six breaches of the Central Bank's code of practice.

Regulators say the breaches relate to it code over lending to 'related parties'.

The code requires banks and building societies to have proper systems, controls and oversight in place when it comes to loans to related parties such as directors or senior managers.

The Central Bank says Citibank's breaches include failure to have the necessary policies and processes in place; failure to report certain details to the Central Bank; and failure to obtain approval of its own Related Party Lending Committee before granting or varying certain loans.

Citibank has admitted to the breaches, according to regulators.

Seána Cunningham, the Central Bank’s Director of Enforcement and Anti Money Laundering, explained: "The Related Party Lending Code was introduced to create a formal framework for credit institutions to prevent abuses and address possible conflicts of interest by requiring all related party lending to be at arm’s length and subject to management oversight and regular reporting to the Central Bank.

"The Central Bank’s investigation found that Citibank failed to put in place the necessary governance, policies and procedures to implement the regime until 2 years and 8 months after the Code came into effect. Those deficiencies were followed by breaches of reporting and loan approval requirements. The breaches are admitted by the firm.

She added: "Citibank has fallen far short of the Central Bank’s expectations in this regard, which is wholly unacceptable."

The Central Bank says that it is now satisfied the company has taken 'the necessary steps to rectify the deficiencies'.