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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 Indias most diverse and recognized financial service providers operating

through 40 branches of Citibank N.A. across 20 cities and through various finance companiesoperating directly/indirectly out of locations across the country. Citigroup India offers acomplete range of corporate and investment banking services under the Citigroup brand name,consumer banking products and services under the Citibank banner and consumer financeunder 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 globalcorporate and investment banking group provides a range of financial services including treasurymanagement, transaction services including cash management and trade services, securitiescustodianship, foreign exchange, fixed income and equities sales and trading, and corporatefinance to corporate clients, governments and financial institutions. In retail banking, Citibankoffers credit cards, mortgages, personal and auto loans, insurance, and investment services for

customers. In addition to the above, Citigroup has significant investment through its venturecapital arm in various software/non-software companies in India, the primary ones being i-FlexSolutions Limited and Polaris Software Labs Limited. Citigroup was also one of the pioneers inhousing 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 customerslike: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 CitibankCard,Citibank Silver International Card, CRY Card, WWF Card, Times Card, CitibankCricket 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

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Cash Management services

Citi integrated receivables and payables solutions with diverse ERP systems in India, andimplemented 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 Bankingensure the completeness of solution by incorporating cross-border CM needs. In India, Citibankhas pioneered the development of automated self-service kiosks (Citibank Easy PaymentCenters) which facilitates bill collections on a 24/7/365 basis. It is an unique solution thatoffers consumers the flexibility of multiple payment options including cash and cheque and moreimportantly 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 highconcentration 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 thebanks credit risk management practices. Citibank began to restructure the corporate lending and

credit functions to incorporate a credit portfolio management strategy. Citibank began toemphasize the development of credit risk measurement techniques for loans similar to an optionsvaluation model that would support the mark-to-market analysis and portfolio credit risk for theentire banks portfolio. Although the focus was mainly on large corporate and middle marketfacilities, it eventually led to the development of Citibank Loan Index (CLI). The index wasdesigned to function like a equity or bond portfolio through which loans are bought and soldbased on performance objectives. Loans that did not meet the performance objectives were soldoff or transferred according to the index objectives.

Promotional activities

Citibank engages in promotional activities in order to increase the market share. The promotionalactivities 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 transferservice to India Citi Online Remit. The campaign is showcased with a viral video designed byWebchutney. This creative work is titled Pran Jaye Par Vachan Na Jaye.The video shows thatCiti 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 hasNRI specific services. It also has a link called NRI Zone which transfers you toMoneycontrol.com to a page with NRI specific content

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2) May the best man win

Citibank has come up with a sequel to its viral ad campaign in which it promotes its CitibankPreferred NRI Account. The feature is titled May the best man win .

The ad showcases discounts and exclusive offers available for Citibank Preferred NRI Accountusers through selected brand partners: Avis, Airtel and Tanishq.

This campaign highlights three paradigm changes taking place in the sphere of financial servicesmarketing in India.

Firstly, use viral advertising.

Secondly, using of animation. In the recent past several financial services brands have resorted toanimation/animated characters to stand out from the clutter. Namely, Bajaj Allianz (SuperAgent) and ICICI Bank (Young Stars).

Finally, the use of multiple languages in this campaign is certainly an innovative attempt atincreasing reach and personalising the communication. The viral is published in 5 popular Indianlanguages

However, Citibank seems to be serious about targeting NRIs and its recent effort for out of theidiot-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 appearanceof the card is very colourful and different from the regular cards. Citibank has tied up with 100outlets in Mumbai covering book stalls, pubs, gyms, etc. which are like regular hangout pointsfor 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 atwitter account. Both have meager following and the basic information is advertisement for theirnew 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 offerto buy Nokia 6212

Launched in Bengaluru by Citibank, Citi Tap and Pay is the latest next gen contactlessexperience being experimented in India.

Citi Tap and Pay works on a cutting-edge new technology called NFC: Near FieldCommunication.

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NFC is a wireless communication technology that works on mobile phones, it allows datatransfer 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 beeligible to sign up for Citi Tap and Pay, subject to conformance with Citibanks internallydetermined 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 discountedprice. 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 6212phone 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 cashback offer, the customer will be eligible for a cash back of Rs. 2,500, on making 6 purchasesbefore October 31, 2009, and a cash back of Rs. 5,000, on making 12 purchases before October31, 2009.

He can then download his Citi Tap and Pay Credit Card onto the new Nokia 6212 phone. TheCiti Tap and Pay personnel at the store will guide through this process.

Citi has tied up withNokia,Vodafone,MasterCard,ViVOtech as partners to establish thismobile payments ecosystem in Bangalore

5)Citibank & Reliance Retail form Consumer Finance JV

Mukesh Ambanis Reliance Retail andCitibank have inked an understanding to setup a JV forConsumer Finance. Citibank already runs a consumer finance company under the nameCitifinancial. The initial focus of the 50:50 JV would be the 38lakh customers of RelianceRetails loyalty programme Reliance One. The JV will deal largely in loans and co -brandedcredit cards.

6)A credit card that doubles as a metro smart card in Delhi

Citibank India and theDelhi 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 theadvantages of a Citibank credit card.

The Delhi Metro Citibank Credit Card is unique in several other ways, in the sense that rewardpoints 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,

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Pitampura, Rajouri Garden and Dwarka Mor Metro Stations. These are scheduled to soon spreadacross other stations as well. Additionally, the card offers double reward points for Metrospending, and will not require the mandatory security deposit of Rs50.

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 hadconducted trials of the tap-and-go or contactless payment at select New York city subwaystations, in association with MTA and MasterCard. Following the trials, the service was rolledout 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 havebeen 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 productlaunches and superior customer service, it has emerged as the second largest foreign bank in thecountry (in terms of total assets). The bank had a market share of 22 per cent among the foreignbanks 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 bankingindustry.

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 baseof 2.3 million customers. Constant product innovation has led Citibank to launch the industrysfirst co-branded and affinity cards with leading organizations. Presently, Citibank has over 7.5lakh co-branded card members. In 2003, Citibank had a market share of 35 per cent in terms ofspending.

Awards

In 2002, Euromoney ranked Citibank as the worlds Number 1 Cash Management Services

provider In 2002, The Asian Banker Gilboa Report rated Citibank Indias 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

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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 loanwith 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 thissegment with a healthy market share of 24 per cent with expansion through various innovativeproducts.

Internet Banking: Citibank also provided Indias first and most comprehensive InternetBanking 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 hasenabled Internet banking for corporate as well.

Citibank was the largest mobilizer of funds by nonpublic sector bank (second after the StateBank 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 hasleveraged the changing demographic profile in India by targeting the attractive retail-bankingsegment. Citibank was a pioneer in consumer banking, being one of the first to introduce focusedconsumer lending programs and electronic banking. For the corporate banking segment, Citibankwas first to launch cash management services in 1986 and it continues to be the leader in thissegment. In 2001, throughput for this channel was US$ 25 billion (about 6 per cent of IndiasGDP). Currently over 2,250 corporations and financial institutions in India use this platform. Asthe leading custodian bank, Citigroup has over US$ 13 billion of custody assets undermanagement, an 8 per cent share of the foreign exchange market. The Bank has also leadmanaged 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 oflaunch, Suvidha account offered unmatched benefits like utility bill payments, automatic

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creation of fixed deposits, direct credit of salary reimbursements etc. The success ofSuvidha created a new product platform for the Citigroup global franchise.

Citibank launched Citigold Wealth Management - a set of global financial planning toolsand 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 loansat a concessional rate of 7 per cent per annum.

For NRIs, Citibank has introduced services like Citi Online Remit and Citibank PreferredNRI 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, withcreation of the first PTC in 1996 and has created liquidity in this segment through activepurchase and sale of securitized paper as well as listing of the PTCs on the Indian stockexchange to provide secondary market liquidity to investors. With the liberalization of the Indianmarket, it has also introduced complex derivatives and options structures to enable customers tomanage their risks more effectively.

Strong parental support and strong local management:

Citigroups global platform allows it to introduce new products quickly as compared tocompetitors. At the same time, by localizing products, Citibank India offers its customers theadvantages of a local bank. A strong local management effectively supported by a high-qualityworkforce has been a key factor for Citibanks success in India. The Indian subsidiary has theflexibility 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) inIndia. These successful solutions are being adopted as models for other Asian countries likeTaiwan 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:

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Citigroup, worldwide has recognised and leveraged Indian managerial talent. Personnel fromCitigroup India are routinely assigned to global positions at Citigroup. Over 300 professionalsand 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 solutionsand offshore IT services, has developed, deployed and supported solutions for over 10 millionCitibank 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-enabledsolutions to the financial services industry, supported by latest technology and robustinfrastructure for volume-intensive processing and the customer care needs of its customerslocated 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 CitibankIndia, Sri Lanka and Bangladesh; credit cards services for Eastern Europe, Middle East andAfrica and bank back-office processing work for Citibank in Europe.