Japan will order
Citigroup to suspend some of its retail business in Japan for lax oversight against money laundering, five years after the US firm’s private bank was ordered to leave the world’s second-largest economy for malpractices, Reuters reported, citing two people familiar with the matter.

The Financial Services Agency will announce the punishment today, the sources were quoted as saying by the news agency. The report did not say whether the order to leave Japan will last for a specific period of time.

Yoshito Shimoyama, a spokesman for Nikko Citi Holdings, Citigroup's holding firm in Japan, said it would be inappropriate to comment on reports about the regulator's action. A spokesman for the regulator declined to comment, Reuters said.

In 2004, Citigroup was forced to shut down its private banking business in Japan for a raft of violations, including loose money-laundering controls.

Japan has proven a tough market for Western banks to enter, with most of its wealthy clients preferring to bank with domestic institutions.