Background

Citigroup opened its first office in India in Kolkata (Calcutta) in 1902. With capital nearing US$
1 billion it is the single largest foreign direct investor in the financial services industry in India.
It has become one of India’s most diverse and recognized financial service providers operating
through 40 branches of Citibank N.A. across 20 cities and through various finance companies
operating directly/indirectly out of locations across the country. Citigroup India offers a complete
range of corporate and investment banking services under the “Citigroup” brand name, consumer
banking products and services under the “Citibank” banner and consumer finance under the
“CitiFinancial” banner. Citigroup has a customer base of over 900 large corporate, over 22,000
small and medium enterprises and over 3,500,000 retail customers. The global corporate and
investment banking group provides a range of financial services including treasury management,
transaction services including cash management and trade services, securities custodianship,
foreign exchange, fixed income and equities sales and trading, and corporate finance to corporate
clients, governments and financial institutions. In retail banking, Citibank offers credit cards,
mortgages, personal and auto loans, insurance, and investment services for customers. In
addition to the above, Citigroup has significant investment through its venture capital arm in
various software/non-software companies in India, the primary ones being i-Flex Solutions
Limited and Polaris Software Labs Limited. Citigroup was also one of the pioneers in housing its
back office processing/call centre company for its global activities in India through e-Serve
International Limited.

Products and Offerings

• The Citibank India offers a varied range of financial assistance to its customers
like:Deposit Accounts - Savings Accounts, Current Accounts, and Term deposits.
• Loans - Personal Loans, Home Loans, Loan against property, Auto Loan, Ready Credit
• Credit Cards - Citibank Gold Card, Jet Airways Citibank Gold Card, Hutch Citibank
Card, IndianOil Citibank Card, Shoppers' Stop Citibank Card, MTV Citibank
Card,Citibank Silver International Card, CRY Card, WWF Card, Times Card, Citibank
Cricket Visa Card
• Investments - Mutual Funds, Demat
• Insurance - Life Insurance Solutions, Credit Insurance, Health Insurance, Travel
Insurance
• Banking - Suvidha Account, Debit Cards, Citibanking, CitiGold Wealth Management
• CitiBusiness - Current Account, Loans, CitiBusiness Card
• NRI Services - Rupee Checking Account, India Deposits
• Online Services - Internet Banking, Bill Payment, Statement on E-mail, E-Commerce,
CitiAlert

Cash Management services

Citi integrated receivables and payables solutions with diverse ERP systems in India, and
implemented host-to-host mode of data processing with our customer back-office systems.
Citibank, India has implemented payment gateway solutions (CitiConnect) which fulfil the
financial settlement and e-credit needs of customers. Worldlink and CitiDirect @Online Banking
ensure the completeness of solution by incorporating cross-border CM needs. In India, Citibank
has pioneered the development of automated self-service kiosks (Citibank Easy Payment
Centers) which facilitates bill collections on a “24/7/365” basis. It is an unique solution that
offers consumers the flexibility of multiple payment options including cash and cheque and more
importantly provides a “receipt” as proof of payment.

Credit Risk Management Practices

Like most of the banking industry during the late 1980s and the early 1990s, the high
concentration of leveraged buyout and commercial real estate loan defaults that besieged
Citibank provoked former CEO and Chairman John Reed to take an active role in reassessing the
bank’s credit risk management practices. Citibank began to restructure the corporate lending and
credit functions to incorporate a credit portfolio management strategy. Citibank began to
emphasize the development of credit risk measurement techniques for loans similar to an options
valuation model that would support the mark-to-market analysis and portfolio credit risk for the
entire bank’s portfolio. Although the focus was mainly on large corporate and middle market
facilities, it eventually led to the development of Citibank Loan Index (CLI). The index was
designed to function like a equity or bond portfolio through which loans are bought and sold
based on performance objectives. Loans that did not meet the performance objectives were sold
off or transferred according to the index objectives.

Promotional activities
Citibank engages in promotional activities in order to increase the market share. The promotional
activities undertaken by Citibank in the year 2008-2009 are as follows:
1)‘Pran Jaye Par Vachan Na Jaye.’
Citibank has launched a viral marketing campaign to promote its new online money transfer
service to India Citi Online Remit. The campaign is showcased with a viral video designed by
Webchutney. This creative work is titled ‘Pran Jaye Par Vachan Na Jaye.’ The video shows that
Citi Online Remit offers the ideal solution to the NRI to transfer money to India from the
comfort of his home.
Citibank seems quite keen to capture the NRI market. It also has a microsite for NRIs which has
NRI specific services. It also has a link called NRI Zone which transfers you to
Moneycontrol.com to a page with NRI specific content

2) ‘May the best man win ’

Citibank has come up with a sequel to its viral ad campaign in which it promotes its ‘Citibank
Preferred NRI Account’. The feature is titled ‘May the best man win ’.
The ad showcases discounts and exclusive offers available for Citibank Preferred NRI Account
users through selected brand partners: Avis, Airtel and Tanishq.
This campaign highlights three paradigm changes taking place in the sphere of financial services
marketing in India.
Firstly, use viral advertising.
Secondly, using of animation. In the recent past several financial services brands have resorted to
animation/animated characters to stand out from the clutter. Namely, Bajaj Allianz (Super Agent)
and ICICI Bank (Young Stars).
Finally, the use of multiple languages in this campaign is certainly an innovative attempt at
increasing reach and personalising the communication. The viral is published in 5 popular Indian
languages
However, Citibank seems to be serious about targeting NRIs and its recent effort for ‘out of the
idiot-box’ approach deserves some click
3) MTV and Citibank launched a joint credit card
Citibank and MTV India have launched a joint credit card. According to Atul Malik, director
marketing (cards), Citibank India, it as a product for the ‘Young at Heart.’ Even the appearance
of the card is very colourful and different from the regular cards. Citibank has tied up with 100
outlets in Mumbai covering book stalls, pubs, gyms, etc. which are like regular hangout points
for the youth where they will get discounts which is an added attraction for the customer.
Also looking around a bit we find that Citibank India has an official facebook page and also a
twitter account. Both have meager following and the basic information is advertisement for their
new offers.
A lot more can be done with both these platforms but alteast it is a start.
4) Citibank launched contactless payment Citi Tap and Pay along with a discounted offer to
buy Nokia 6212
Launched in Bengaluru by Citibank, Citi Tap and Pay is the latest next gen contactless
experience being experimented in India.
Citi Tap and Pay works on a cutting-edge new technology called NFC: Near Field
Communication.
NFC is a wireless communication technology that works on mobile phones, it allows data
transfer between 2 NFC enabled devices, and even allows financial transactions like payments.
To use Tap and Pay:
• One must be a holder of a Citibank-issued MasterCard Credit Card in Bengaluru to be
eligible to sign up for Citi Tap and Pay, subject to conformance with Citibank’s internally
determined criteria for eligibility.
• One will need a Nokia 6212 handset with a Vodafone connection.
• One must have registered your Vodafone mobile phone number with Citibank to avail the
Citi Tap and Pay facility.
A customer can get Nokia 6212 handset from select Nokia outlets at Bengaluru for a discounted
price. He will be one of 3000 eligible Citibank customers to take part in an exciting programme,
which is the first of its kind in the country. The customer will have to purchase a Nokia 6212
phone at a special price of Rs. 5,000 (against an MRP of Rs. 11,639) and use it at the specified
retail stores to make payments for purchases on his Citibank Credit Card. Through a special cash
back offer, the customer will be eligible for a cash back of Rs. 2,500, on making 6 purchases
before October 31, 2009, and a cash back of Rs. 5,000, on making 12 purchases before October
31, 2009.
He can then download his Citi Tap and Pay Credit Card onto the new Nokia 6212 phone. The
Citi Tap and Pay personnel at the store will guide through this process.
Citi has tied up with Nokia, Vodafone, MasterCard, ViVOtech as partners to establish this mobile
payments ecosystem in Bangalore
5) Citibank & Reliance Retail form Consumer Finance JV
Mukesh Ambani’s Reliance Retail and Citibank have inked an understanding to setup a JV for
Consumer Finance. Citibank already runs a consumer finance company under the name
Citifinancial. The initial focus of the 50:50 JV would be the 38lakh customers of Reliance
Retail’s loyalty programme “Reliance One”. The JV will deal largely in loans and co-branded
credit cards.
6) A credit card that doubles as a metro smart card in Delhi
Citibank India and the Delhi Metro Rail Corporation (DMRC) announced the launch of India’s
first co-branded, ‘2-in-1′ transit credit card, the Delhi Metro Citibank credit card.
The first of its kind in India, the card combines the benefits of a Metro smart card, with the
advantages of a Citibank credit card.
The Delhi Metro Citibank Credit Card is unique in several other ways, in the sense that reward
points accumulated on this card can be redeemed for free Metro rides, at the Citibank point-of-
sale terminals, which are presently installed at Rajeev Chowk, Kashmere Gate, Barakhamba,
Pitampura, Rajouri Garden and Dwarka Mor Metro Stations. These are scheduled to soon spread
across other stations as well. Additionally, the card offers double reward points for Metro
spending, and will not require the mandatory security deposit of Rs50.
It is India’s first credit card that doubles as a contact-less access card for the Delhi Metro
stations, allowing customers “tap and go” entry into DMRC stations. In 2006, Citibank had
conducted trials of the ”tap-and-go” or contactless payment at select New York city subway
stations, in association with MTA and MasterCard. Following the trials, the service was rolled
out at the New York subway MTA. However, the DMRC co-brand card is associated with Visa.
Citi has successfully launched similar products in New York and Singapore, both of which have
been extremely well received.
Credits:
Citibank has many credits to its account. They are as follows:

1) Second largest foreign bank in India

Citibank India is a leading foreign retail bank in India. With the help of innovative product
launches and superior customer service, it has emerged as the second largest foreign bank in the
country (in terms of total assets). The bank had a market share of 22 per cent among the foreign
banks in India. Citibank’s profits have grown at a CAGR of 28 per cent over the last 5 years. At
1.2 per cent, Citibank has one of the lowest non-performing assets in the Indian banking industry.

Leading issuer of credit cards in the country

Citibank was the first to launch credit cards in India and today has the largest card member base
of 2.3 million customers. Constant product innovation has led Citibank to launch the industry’s
first co-branded and affinity cards with leading organizations. Presently, Citibank has over 7.5
lakh co-branded card members. In 2003, Citibank had a market share of 35 per cent in terms of
spending.

Awards

• In 2002, Euromoney ranked Citibank as the world’s Number 1 Cash Management Services
provider
• In 2002, The Asian Banker Gilboa Report rated Citibank India’s Internet banking service as the
best in Asia.
• Best Bank – 2002 by Business India
• Euromoney Forex Poll 2002 award for “No. 1 Forex Dealer” in India
• Asiamoney Treasury Poll award for “Best Derivatives Bank” in India
• Business Today: Most Productive Bank 2003 (Best Banks Survey by BT-KPMG)
• Best Local Currency Bond House by Finance Asia 2002
• Asian Banker Retail Product Excellence Award: Citibank India MTV Credit Card

Key Milestones of Citigroup:

• Mortgage Services: Citibank was the first to launch Home Credit (in 1990), a facility to utilize
surplus funds to save interest and PAM (Preserved Asset Mortgage), a 100 per cent home loan
with security in equity, mutual funds, etc.

• Auto Loans: Citibank pioneered organized auto financing in India in August 1986.

• Personal Loans: Citibank entered this business in 1989 and is considered a pioneer in this
segment with a healthy market share of 24 per cent with expansion through various innovative
products.

• Internet Banking: Citibank also provided India’s first and most comprehensive Internet
Banking service covering both resident and NRI customers, with a ‘single-glance statement’
enabling customers to get complete information on all their banking relationships. The bank has
enabled Internet banking for corporate as well.

• Citibank was the largest mobilizer of funds by non–public sector bank (second after the State
Bank of India) for the Resurgent India Bonds (RIB) 1998 and the India Millennium Deposit
(IMD), 2000 sourcing US$ 830 million and US$ 840 million respectively.

Factors for success

Universal banking strategy:

Citibank has been one of the early adopters of a universal banking strategy. The bank has
leveraged the changing demographic profile in India by targeting the attractive retail-banking
segment. Citibank was a pioneer in consumer banking, being one of the first to introduce focused
consumer lending programs and electronic banking. For the corporate banking segment, Citibank
was first to launch cash management services in 1986 and it continues to be the leader in this
segment. In 2001, throughput for this channel was US$ 25 billion (about 6 per cent of India’s
GDP). Currently over 2,250 corporations and financial institutions in India use this platform. As
the leading custodian bank, Citigroup has over US$ 13 billion of custody assets under
management, an 8 per cent share of the foreign exchange market. The Bank has also lead
managed and participated in raising capital for Indian companies through Euro loans, GDRs and
FRNs in excess of US$ 2.5 billion.

Targeting customer segments with focused products:

Citibank India has been rolling out products targeted towards specific customer segments:

• Citibank launched the Suvidha Account for salaried customers in 1998. At the time of
launch, Suvidha account offered unmatched benefits like utility bill payments, automatic
creation of fixed deposits, direct credit of salary reimbursements etc. The success of
Suvidha created a new product platform for the Citigroup global franchise.
• Citibank launched Citigold Wealth Management - a set of global financial planning tools
and wealth management services in 2002, to complement its range of banking services.
This is targeted at high-net-worth priority customers who want to grow and protect their
wealth.
• For working women, Citibank has launched the Woman’s Account in 2003. This is a
zero-balance savings account scheme for women. The scheme also offers housing loans
at a concessional rate of 7 per cent per annum.
• For NRIs, Citibank has introduced services like Citi Online Remit and Citibank Preferred
NRI Account

Developing financial markets in India:

Citigroup has been instrumental in developing the financial markets in India through the launch
of innovative and global products in India. It has been a pioneer in the securitization market, with
creation of the first PTC in 1996 and has created liquidity in this segment through active
purchase and sale of securitized paper as well as listing of the PTCs on the Indian stock
exchange to provide secondary market liquidity to investors. With the liberalization of the Indian
market, it has also introduced complex derivatives and options structures to enable customers to
manage their risks more effectively.

Strong parental support and strong local management:

Citigroup’s global platform allows it to introduce new products quickly as compared to

competitors. At the same time, by localizing products, Citibank India offers its customers the
advantages of a local bank. A strong local management effectively supported by a high-quality
workforce has been a key factor for Citibank’s success in India. The Indian subsidiary has the
flexibility to innovate and launch new products within guiding principles defined by Citigroup,
USA.

Leveraging the India Advantage

Role model for similar international markets:

Citigroup has developed segment specific solutions for small and medium enterprises (SMEs) in
India. These successful solutions are being adopted as models for other Asian countries like
Taiwan and Korea. Similarly, the solutions developed by Citigroup for Non-resident Indians
(NRIs) have been adopted successfully in countries like Pakistan.

Source for managerial talent:

Citigroup, worldwide has recognised and leveraged Indian managerial talent. Personnel from
Citigroup India are routinely assigned to global positions at Citigroup. Over 300 professionals
and staff from its offices in India are now in Citigroup’s international cadre.

Software development for global operations:

Citigroup has made India its global software development, software maintenance and BPO hub.
Polaris Software Lab, an India-based leading global provider of financial technology solutions
and offshore IT services, has developed, deployed and supported solutions for over 10 million
Citibank customers in 70 countries across the world.

Back office operations for Global operations:

Citigroup has established e-Serve International Ltd. (formerly known as Citicorp Securities &
Investments Ltd.) in India, for its BPO activities. e-Serve focuses on providing IT-enabled
solutions to the financial services industry, supported by latest technology and robust
infrastructure for volume-intensive processing and the customer care needs of its customers
located in over 25 countries across North America, Europe, Africa, South Asia and Middle East.
e-Serve handles all the cash management and trade finance transaction processing for Citibank
India, Sri Lanka and Bangladesh; credit cards services for Eastern Europe, Middle East and
Africa and bank back-office processing work for Citibank in Europe.