A Citibank spokesman has dismissed outright suggestions by bloggers that a recent decision by the company to quietly reduce the daily ATM cash withdrawal limits of customers had something to do with Citibank's cash-reserve position.
The move on a specific set of customers was purely precautionary and prompted by fraudulent ATM activity in the New York City area, said the spokesman.
"We did this to protect our customers," he said. "There is no connection between this action and Citi's capital position."
Citibank's new caps on ATM withdrawals for some of its customers started in mid-December but came to light only last week after the New York Daily News carried a story on it.
The so far relatively sparse information from Citibank appears to be stoking some concern in the blog world over the cause for the lowered daily limits, especially in light of the financial troubles the company is currently facing.
Several readers responding to an article on the new limits on EconomicsBriefing.com expressed similar doubt over Citibank's claims of fraudulent ATM activity.
One anonymous poster, for instance, suggested that it was "more likely that Citi is having problems acquiring hard cash, and is passing on that difficulty to their customers".
Avivah Litan, an analyst with Gartner, said that one plausible theory is that ATMs in the NYC area were subject to software attacks. "This has happened before with certain brands and types of ATM machines," she said. "So Citi decided to limit the damage by limiting withdrawal amounts across the board."
She also said that while media reports have suggested that only customers in New York felt the impact, it is quite possible that Citi's actions were not limited to the city.
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