June 17 (Reuters) - The Federal Deposit Insurance Corp's

five-member board plans to vote on Thursday to downgrade its

rating on Citigroup's ( C/PN ) data-management systems to a

"deficiency" from a "shortcoming," according to a government

official familiar with the matter.

The U.S. Federal Reserve and the FDIC in 2022 had identified

a shortcoming in Citi's so-called living will that details how

the firm would be unwound in the event of bankruptcy. Escalating

those concerns to a "deficiency" could kick-start a process

where regulators order the bank to make changes to its

operations if both the Fed and FDIC agreed.

The Fed, however, is not expected to join the FDIC in

escalating its concerns about the bank's plan, the official

said. The Wall Street Journal was the first to report on the

move.

Spokespeople for the Fed and FDIC declined to comment.

Banking regulators had said problems with Citi's data

governance could adversely affect its ability to produce timely

and accurate data during a period of financial stress and told

the bank to take urgent action to fix its resolution plan.

"We have rigorous, firm-wide stress testing and resolution

planning processes and we're always working to improve and

strengthen those capabilities," Citi said in a statement.

"Our balance sheet and financial health remains strong, with

high levels of capital, liquidity and reserves. We continue to

have confidence that Citi could be resolved without the use of

taxpayer funds or an adverse impact on the financial system,"

the bank said.