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Citibanks Indian Business Model

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 Indias 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 loans, 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


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 banks 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 banks 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

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 Citibanks 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 Ambanis 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 Retails 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 Indias 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


It is Indias 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.


Citibank has many credits to its account. They are as follows:

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. Citibanks 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 industrys 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.

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 Indias 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 as indidual customers.

Citibank was the largest mobilizer of funds by nonpublic 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 Indias 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


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 Womans 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


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:

Citigroups 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 Citibanks 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 Citigroups

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.