(Reuters) – Citigroup’s enlargement plan in China has hit a roadblock with U.S. regulators after the Federal Reserve imposed a penalty on the financial institution for its knowledge administration and threat controls, Bloomberg Information reported on Sunday.

The financial institution is going through delays in setting up a standalone securities agency as a result of it hasn’t but obtained a clearance letter from the U.S. Fed verifying its regulatory standing, which is required by Chinese language authorities, Bloomberg mentioned.

Citi was instructed to resolve its knowledge administration issues at residence, after being hit with a mixed $136 million in fines in July, the report mentioned. The fines make it tougher to fulfill China’s licensing guidelines, it added.

The New York-based financial institution is continuous its discussions with China’s securities regulator to set up the enterprise, and has no plans to drag its utility, Bloomberg reported citing individuals acquainted with the matter, including that the scenario is fluid and will change.

Citigroup didn’t instantly reply to a Reuters request for remark.