a study on mortgage processing function of citibank n.a

8/13/2019 A STUDY ON MORTGAGE PROCESSING FUNCTION OF CITIBANK N.A

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PROJECT REPORT

ON

A STUDY ON MORTGAGE PROCESSING FUNCTION OF CITIBANK N.A

AT

CITIBANK N.A

AHEMDABAD

FOR

THE PARTIAL FULFILLMENT OF THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

FROM GGSIP UNIVERSITY

DELHI

BATCH 2012-2014

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GGRREEAATTEERRNNOOIIDDAA((UUPP))220011330066

SUPERVISOR CERTIFICATE


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This is to certify that MANINDER GREWAL a student of Master of

Business Administration, Batch MBA-09, Army Institute Management

& Technology, Greater Noida, has successfully completed her project

under my supervision.

During this period, she worked on the project titled STUDY ON

MORTGAGE LOAN PROCESSING FUNCTION OF CITIBANK At

CITIBANK N.A , AHEMDABAD in partial fulfillment for the award of

the degree of Master of Business Administration of GGSIP University,

Delhi.

To the best of my knowledge the project work done by the candidate has

not been submitted to any university for award of any degree. Her

performance and conduct has been good.

Prof. S.Mohanty

AIMT-Gr. Noida

Date:18 NOVEMBER 2013


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CERTIFICATE OF ORIGINALITY

I, Ms Maninder Grewal, of MBA 09 batch of Army Institute of Management

& Technology has undergone a Summer Internship in Citibank N.A for a

duration of 45 days on a project title Study On Mortgage Loan Processing

Function hereby declare that this project is my original piece of work.

Signature of the student:

Student Name:

Date:


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ACKNOWLEDGEMENT

I want to show my sincere gratitude to all those who made this study possible.

First of all I am thankful to the helpful staff and the faculty of Army Institute of

Management and Technology.

Secondly, I would like to extend my sincere thanks to my Industry Guide, Mr.

Sandeep Singh Deo, for his untiring cooperation. One of the most important

tasks in every good study is its critical evaluation and feedback which was

performed by my faculty guide Prof. S. Mohanty. I am very thankful to my

faculty as well as industry guide for investing his precious time to discuss and

criticize this study in depth, and explained the meaning of different concepts

and how to think when it comes to problem discussions and theoretical

discussions.

My sincere thanks go to my institute and family, who supported and encouraged

me.

Maninder Grewal


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TABLE OF CONTENTS

S. No. TOPIC PAGE NO.

1 Chapter-1: Introduction 7

1.1 Introduction to the topic 8

1.2 Company Profile 10

About Citi Group

About CITI BANK N.A2 Chapter-2: Objective to the study 24

3 Chapter-3: Literature Review 26

4 Chapter-4: Research methodology 43

5 Chapter-5: Data Analysis 46

6 Chapter-6: Findings & Conclusions 63

7 Recommendations and Limitations 65

8 Bibliography 68

9 Appendices 69


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EXECUTIVE SUMMARY

India is a home to more than 1.1 billion people. With about one in every sixth person staying in

India among the most essential necessities of life is the Housing next to importance to food and

clothing. Housing is the prime concern of every individual, Housing, however, is a major

expenditure and cannot be funded out of a family's normal monthly income or savings. The

prospective homeowner must look for a loan substantial in size and so structured that he can

repay it over a longer period of time. Loan is offered to the burrower to purchase or build a new

house on the basis of his/her eligibility and thebankslending rules. Government gave

encouragement for the Housing Finance subsidiaries by offering number of tax concessions to

individuals.

One of the most important benefits of home loans is the interest rate that is allowed .Fixed and

variable rates are also available for various home loans. Many Financiers also offer home

improvement loans at the same interest rate as they offer home loans.Currently, the leading cause

of boom in Indiasfinancial system is that an individual can easily obtain loans at interest rates.

There are number of banks, which provide loans and credit. Government also motivates people

to obtain loans for specific purposes. The government encourages people to obtain housing loans

by providing tax advantages.

Every individual dreams of owning a property one day and Home Loans turns these dreams into

reality. Real estate in India is currently a top notch investment options in Asia. With the presenceof organized Financial Sector and increase in transparency levels, it has become easier to create

financing vehicles.

The potential increase in the disposable income has contributed largely to the increased demand

in the residential segment .In spite of the rise in the Home loan interest rates and qualitative

sanctions being levied by RBI on the banks, buying interest has not waned because home loans

are still cheaper than ten years ago. As the reality prices in India skyrockets, Housing complex is

mushrooming and city landscape become unrecognizable ,the growth across all the real estate

segments and experts opines that demand will remain steady at the current high levels because of

the improving economic environment and the real estate is expected to grow 30% every year.This rising property prices encourages banks and financial institutions to lend more with the

increase in the collateral values.


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INTRODUCTION

THEORETICAL VIEW ON HOME LOANS

The section 5(b) of the Banking Regulation Act 1949 defines Home Loan is a creditto a consumer for the purchase or transformation of the private immovable propertyHe owns or aims to acquire secured either by a mortgage on immovable property. AHome loan requires you to pledge your home as the lenders security for repayment Of your loan .The lender aggress to hold the title or deed to your property until youHave paid back your loan plus interest. In simple terms a home loan is a fund or theLoan which the buyer has taken from any financial institution or bank to purchase aNew home at an agreed rate of in ter es t specif ied du ring the con tract .Home loan isThe finance borrowed from a bank or financial institution to buy or modify aResidential real estate property.

SCHEME OF HOME LOANS

HOME LOANS FOR CONSTRUCTION OF NEW HOUSE /OLD HOUSE

Initially, lenders approved a home loan for family /own residence only .After gaining experienceand more importantly to be competitive, lenders now approve loans even when the applicant hasmore than one house there is no general restriction on the number of houses owned by anindividual. The only stipulation is that the home loan fund should not be used for commercialpurposes.

HOME EXTENSION LOANS

These loans are given for expanding or extending an existing home .These are some of theinstances for which you could take an extension loan.

To construct an additional rooms or floor by getting additional IFSI granted. Using grills or sliding windows to enclose the balcony Construction of a garden or garage


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HOME IMPROVEMENT LOANS

Home improvement loans for repairs / renovations including waterproof , plumbing ,compoundwall ,digging of well /tiling ,addition like built in cupboards/shelves, internal repairs includingreplacing doors/windows .A loan for purchase of household furniture including may also be

sanctioned as home loans


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CITI GROUP

Citigroup Inc.or Citiis an Americanmultinationalfinancial services corporation headquartered

inManhattan,New York City, New York, and United States. Citigroup was formed from one of

the world's largest mergers in history by combining the banking giantCiticorp and financial. The

year 2012 marked Citi's 200th anniversary. It is currently the third largest bank holding company

in the United States by assets. Its largest shareholders include funds from the Middle East

andSingapore.

Citigroup has the world's largest financial services network, spanning 140 countries with

approximately 16,000 offices worldwide. The company currently employs approximately260,000 staff around the world, which is down from 267,150 in 2010, according to Forbes. It

also holds over 200 million customer accounts in more than 140 countries. It is one of

theprimary dealers inUS Treasury securities. According to Forbes, at its height Citigroup used

to be the largest company and bank in the world by total assets with 357,000 employees until

theglobal financial crisis of 2008.Today it is ranked 20th in size under the Fortune 500 list. In

comparison,JPMorgan Chase,which is ranked 16th on the Fortune 500, is now the largest bank

in U.S. as of 2012.

Citigroup was formed on October 9, 1998, following the $140 billion merger of Citicorp

andTravelers Group to create the world's largest financial services organization. The history ofthe company is, thus, divided into the workings of several firms that over time amalgamated into

Citicorp, a multinational banking corporation operating in more than 100 countries; or Travelers

Group, whose businesses covered credit services, consumer finance, brokerage, and insurance.

As such, the company history dates back to the founding of: the City Bank of New York

(laterCitibank)in 1812; Bank Handlowy in 1870;Smith Barney in 1873,Banamex in

1884;Salomon Brothers in 1910.
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Manhattanhttp://en.wikipedia.org/wiki/Citigroup#Citicorphttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Primary_dealerhttp://en.wikipedia.org/wiki/United_States_Treasuryhttp://en.wikipedia.org/wiki/Global_financial_crisis_of_2008http://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/Travelers_Grouphttp://en.wikipedia.org/wiki/Citibankhttp://en.wikipedia.org/wiki/Smith_Barneyhttp://en.wikipedia.org/wiki/Banamexhttp://en.wikipedia.org/wiki/Salomon_Brothershttp://en.wikipedia.org/wiki/Salomon_Brothershttp://en.wikipedia.org/wiki/Banamexhttp://en.wikipedia.org/wiki/Smith_Barneyhttp://en.wikipedia.org/wiki/Citibankhttp://en.wikipedia.org/wiki/Travelers_Grouphttp://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/Global_financial_crisis_of_2008http://en.wikipedia.org/wiki/United_States_Treasuryhttp://en.wikipedia.org/wiki/Primary_dealerhttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Citigroup#Citicorphttp://en.wikipedia.org/wiki/Manhattanhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Multinational_corporation


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BUSINESS

Citi is organized into two major segmentsCiticorp and Citi Holdings. Citicorp contains

Consumer and Institutional Clients Group core businesses. Citi Holdings contains Citi's

Brokerage and Asset Management (includes Smith Barney), Global Consumer Finance, and

Citi's Special Asset Portfolios.

CONSUMER BUSINESS

Citi's Global Consumer Business (GCB), also called Regional Consumer Banking (RCB), is one

of the largest retail banks in the world. It serves more than 100 million clients in 40 countries. Its

revenues consist of 50% of the total revenue within Citicorp in 2011. Its deposits accounts for

40% of its total deposits. Citi's GCB businesses consist of five divisions: Retail Banking(Citibank), Citi Branded Cards (CitiCards), CitiMortgage, Citi Commercial Banking and Citi

Retail Services (formerly Citi Retail Partner Cards)

CITIBANK (RETAIL BANKING)

Retail banking encompasses the Citi's global branch network, brandedCitibank.Citibank has

more than 4,600 branches in the world and holds more than $300 billion deposits. Citibank is the

third largest retail bank in the United States based on deposits, and it has Citibank branded

branches in countries throughout the world, with the exception of Mexico which is under a

separate subsidiary called Banamex. Banamex, which serves about 20 million clients, is

Mexico's largest local financial institution as measured by assets. Citibank offers

Citibank/Citigold Checking and Savings accounts, Small Business and Commercial Banking andPersonal Wealth Management among its services. In 2011, Citi is the first bank to introduce

digitized Smart Banking branches in Washington, D.C., New York, Tokyo and Busan (South

Korea) while continued renovating its entire branch network. New sales and service centers were

also opened in Moscow and St. Petersburg. Citi Express modules, 24-hour service units, were

introduced in Colombia. Citi recently opened new branches in three new cities in China as part

of its plan to expand Citi's presence in People's Republic of China to 13 cities.

Additionally, Citibank offersCitigold services world-wide tomass affluent clients with at least

$50,000 USD in liquid assets. In certain markets,Citigold Select is available for clients with at

least $500,000 in liquid assets. Its highest tiered service,Citigold Private Client, is forhigh net

worth individuals with at least $1$3 million in liquid assets (depending on the market region)and offers access to investments and ideas fromCiti Private Bank.
http://en.wikipedia.org/wiki/Citibankhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Mass_affluenthttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/Citi_Private_Bankhttp://en.wikipedia.org/wiki/Citi_Private_Bankhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Mass_affluenthttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Citigoldhttp://en.wikipedia.org/wiki/Citibank


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CITI CARDS (CITI BRANDED CARDS)

Citi Cards is one of the world's largest credit card issuers. Citi Cards is responsible for around

40% of the profits with GCB, and represents the largest issuer of credit cards across the world as

well as a 3,800-pointATM network across 45 countries. Citi Cards introduced several newproducts in 2011, including: Citi Thank You, Citi Executive/Advantage and Citi Simplicity cards

in the U.S... It also has Latin America partnership cards with Colombia-based airline Avianca

and with Banamex and Aero Mexico; and a merchant loyalty program in Europe. Citibank is also

the first and currently the only international bank to be approved by Chinese regulators to issue

credit cards under its own brand without cooperating with Chinese state-owned domestic banks.

CITI RETAIL SERVICES

Citi Retail Services (formerly Retail Partner Cards) moved from Citi Holdings to become an

integral part of GCB in 2012, after expanding several existing partnerships with retail clients and

re-branding to "reflect the more comprehensive suite of services it offers to partners". It is one of

the largest providers of consumer and commercial credit card products, services, and

retailsolutions in the U.S., with nearly 90 million accounts with brands such as The Home

Depot, Macy's, Sears, Shell, and ExxonMobil.

CITI COMMERCIAL BANK

Commercial Banking at Citi serves 100,000 small to medium-size companies in 32 countries.

CITI MORTGAGE

Citi Mortgage services real estate mortgages.

CITI INSTITUTIONAL CLIENTS GROUP

Citi Institutional Clients Group, also known as Securities and Banking, offers investment andcorporate banking services and products for corporate, governments, institutions, and ultra high-

net-worth investors.

Containing Citi's most market-sensitive divisions, "ICG" is divided into four primary businesses:

"Citi Markets" and "Citi Transaction Services" (CTS), "Citi Private Bank", and "Citi Corporate

& Investment Banking".

CITI MARKETS

Citi Markets, also known as Citi Global Markets, provides financial products through

underwriting, sales & trading of a range of investment assets. Citi markets products offered

include equities, commodities, credit, futures, foreign exchange (FX), emerging markets, G10rates, municipals, prime finance/brokerage services, and securitized markets, such as obligations

and mortgage-backedsecurities.

CITI RESEARCH

Citi Research, formerly Citi Investment Research and Analysis (CIRA) division and part of Citi's

Global Wealth Management unit, provides equity and fixed income research, company, sector,

economic and geographic market analysis, and product-specific analysis for Citi's individual and
http://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Solutionhttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Solutionhttp://en.wikipedia.org/wiki/Automated_teller_machine


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institutional clients. Its flagship research reports include the following: Portfolio Strategist, Bond

Market Roundup, U.S. Economics Weekly, International Market Roundup, Global Economic

Outlook & Strategy and the Global Equity Strategist.

CITI PRIVATE BANK

Citi Private Bank is an advisor toultra high net worth individuals and families throughout theworld. It uses an open architecture network of more than 1,000 private bankers and investment

professionals across 46 countries and jurisdictions to provide clients access to global investment

opportunities. It has about $250 billion in assets under management. The minimum net worth

requirement is $25 million in liquid assets and is waived for only law firm groups and other

clients under special circumstances.

Formerly part of Global Wealth Management, Citi Private Bank is now merged into Citi's

Institutional Clients Group. Unlike many of its competitors, since 2009 Citi Private Bank no

longer pays its bankers with commission for selling investment products. Former CEO of Citi

Private Bank, Jane Fraser, said the move meant to bolster Citi Private Bank as an independentwealth management adviser, as opposed to a product pusher.

CITI TRANSACTION SERVICES

Citi Transaction Services (CTS), formerly known as Global Transaction Services (GTS),

provides cash management, trade and securities services to companies, governments and other

institutions in the U.S. and more than 140 countries. It consists of Securities & Funds Services

(SFS) and Treasury & Trade Services (TTS).

CTS intermediates more than $3 trillion in global transactions daily. It has over $13 trillion

assets under custody, about $377 billion in average liability balances, serves 99% of world's

Fortune 100 companies and 96% of the world's Fortune 500 companies, and has 10 regional

processing centers worldwide using global processes.

Institutions use CTS to support their treasury operations with globalsolutions for payments,

collections, liquidity and investments by working in partnership with export credit agencies and

development banks. It also sells supply chain financing products as well as medium- and long-

term global financing programs across multiple industries. In 2011, clients doing business with

Citi in 10 or more countries generated more than 60 percent of Transaction Services' total

revenues. According to the Wall Street Journal, the government aid provided to Citi in

2008/2009 was provided to prevent a world-wide chaos and panic by the potential collapse of its

Global Transactions Services (now CTS) division. According to the article, former CEO Pandit

said if Citigroup was allowed to unravel into bankruptcy, "100 governments around the world

would be trying to figure out how to pay their employees".
http://en.wikipedia.org/wiki/Citi_Private_Bankhttp://en.wikipedia.org/wiki/High-net-worth_individual#Ultra_high_net_worth_individualshttp://en.wikipedia.org/wiki/Solutionhttp://en.wikipedia.org/wiki/Solutionhttp://en.wikipedia.org/wiki/High-net-worth_individual#Ultra_high_net_worth_individualshttp://en.wikipedia.org/wiki/Citi_Private_Bank


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CITI CORPORATE & INVESTMENT BANKING

Citi Corporate & Investment Banking provides strategic and financing products and advisory

services to multinational and local corporations, financial institutions, governments, and

privately held businesses in more than 160 countries. Citi Corporate & Investment Banking wonseveral awards in 2011, including International Financing Review's Best Americas Securitization

for Ford Credit, Best Emerging Asia Bond for Pertamina, Best Latin America Bond for Petro

bras, Best Emerging EMEA Bond for VimpelCom, Best Yen Bond for Panasonic, Best Senior

Financial Bond for Capital One and Best Americas Structure Equity Issue for AIB/MetLife.

CITI HOLDINGS

Citi Holdings consists of Citi businesses that Citi wants to sell and are not considered part of

Citi's core businesses. The majority of its assets are U.S. mortgages. It was created in the wake of

the financial crisis as part of Citi's restructuring plan. It consists of several business entities

including remaining interests in local consumer lending such as One Main Financial, divestitures

such as Smith Barney, and a special asset pool. Citi Holdings represents $156 billion of GAAPassets, or ~8% of Citigroup; 59% represents North American mortgages, 18% operating

businesses, 13% special asset pool, and 10% categorized as other. Operating businesses include

One Main Financial ($10B), PrimeRe ($7B), MSSB JV ($8B) and Spain / Greece retail ($4B),

less associated loan loss reserves. While Citi Holdings is a mixed bag, its primary objective is to

wind down some non-core businesses and reduce assets, and strategically "breaking even" in

2015.


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CITI BANK N.A

Citibank is a multidimensional financial institution that services approximately 200

million corporate and personal consumers around the globe (Hitt, et al, 2011). Before the

financial crisis and subprime mortgage meltdown of 2007, Citibank was one of the most

profitable banks in the United States (Hitt, et al, p. 99). The corporation targets large global

enterprises and governments, and differentiates itself from its competition by emphasizing

customer service. As a result, in 2008 Citibank had financial dealings in 49 markets with more

than $12.5 trillion in assets (Hitt, et al, 2011, p. 101).

Citibanks vision is to become the worlds leading e-business enabler (Hitt, et al, 2011,

p. 105). The banks priority is to meet the changing needs of its customers, and therefore

emphasizes technological advancements to provide seamless and efficient banking systems.

Providing anytime, anyplace banking became an essential component of Citibanks services. An

e-Business strategy was developed to implement this vision by connecting, transforming, and

extending Citibanks technology offerings (Hitt, et al, 2011).

To fulfill this vision and mission, Citibank employs approximately 325,000 staff (Hitt, et

al, 2011). These employees are led by Sanford Weill, Citigroups chief executive, and Jorge

Bermudez, Citigroups executive vice-president and head of global Cash Management and Trade

Services (Hitt, et al, 2011). Citibank also partners with several key technology partners that

include Oracle, Commerce One Inc., SAP AG, Wisdom Technologies, and Bolero.net (Hitt, et al,

2011). Together, Citibank and these partners comprise FinancialSettlementMatrix.com, a

company that supplies buyers and sellers with e-solutions to payment processing (Hitt, et al,

2011).


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Citibank India is an Indian private sector bank headquartered in Mumbai, Maharashtra. It is a

subsidiary ofCitigroup,amultinationalfinancial services corporation fromManhattan,US.

Citi began operations in India over a century ago in 1920 in Kolkata.Citi is a very significant foreign investor in the Indian financial market. The total capital employed

in Citis banking and financial services operations in India including retained earnings is in excess

of $ 3 billion. Citi offers consumers and institutions a broad range of financial products and

services ,including consumer banking and credit , corporate and investment banking ,securities

brokerage, transaction services and wealth management.

As promoter shareholder ,Citi has played a leading role in establishing important marketintermediaries such as depositories , credit bureau, clearing and payment institutions.

Citi is an employer of choice and operates 42 full service Citibank branches in 30 cities across thecountry.

Citi is the preferred banker to more than 40,000 small and mid-sized companies across india.Citi helped lay the foundation of the Indian Software industry by establishing Citicorp overseas

Software limited. Citi pioneered the ITES industry in financial servies through Citigroup GlobalServices limited (CGSL).
http://en.wikipedia.org/wiki/Citigrouphttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Manhattanhttp://en.wikipedia.org/wiki/UShttp://en.wikipedia.org/wiki/UShttp://en.wikipedia.org/wiki/Manhattanhttp://en.wikipedia.org/wiki/Financial_serviceshttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Citigroup


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CITI

CITI HOLDINGS

CITI

FINANCIAL INDIA

LIMITED

CITI

CORP

CITI

BANK


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CREDIT CARDS

CONSUMER

BANKING

CORPORATE

BANKING

INVESTMENT

BANKING

GLOBAL

WEALTH

MANAGEMENT

FINANCIAL

ANALYSIS

PRIVATE

EQUITY


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SALES DEPARTMENTIt basically searches the customer who is in need of loan and

pitches the different kind s of customer accordingly.

CREDIT DEPARTMENT-It is responsible for credit documentation, Profile check, legal

and technical reports of the customer and his property.

OPERATIONS DEPARTMENT-It is responsible for punching end to end .It does NDC

according to RBI norms and performs after sales services .it collects the post dated Cheques.

COLLECTIONS DEPARTMENTIt functions at the time when the customer is in

default.

CITI

MORTGAGE

GROUP

SALES

DEPARTMENT

CREDIT

DEPARTMENT

OPERATIONS

DEPARTMENT

COLLECTIONS

DEAPARTMENT


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PROPERTY

TYPES

PROPERTY

TYPE

HOME

LOANS

READY

PROPERTY

DEVELOPER

UNDER

CONSTRUCTION

PLOT PLUS SELF

CONSTRUCTION

CASH

OUT

READY

PROPERTY


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HOME LOAN SOLUTIONS

CITI BANK

MORTGAGE

LOANS

HOME

LOANS

DEVELOPER UNDER

CONSTRUCTION

READY PROPERTY

SELF

CONSTRUCTION

PLOT PLUS SELFCONSTRUCTION

HOME LOAN TAKEOVER

CASH OUT

LOANS

PROPERTY

POWER

LOANS

TAKE OVER +ENHANCEMENT LOANS

TOP UP

LOANS

OPTIONAL

FEATURES

CITI HOME ONE LOANS

HOME CREDIT FASTTRACK

HOME CREDIT

VANILLA


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HOME CREDIT VANILLA OPTION

Customer can maintain liquidity. Self employed customers can opt for this option that have funds lying idle from time to

time and would want the option of liquidity.

Customer can withdraw interest saves arising out of Home Credit .The overdraft line isincreased.

Loan outstanding reduces by ideal principal component in the loan EMI. Over draft amount is the net amount deposited by the customer plus the interest savings

arising out of home credit. The loan tenor will be sanctioned tenor

FAST TRACK OPTION

Allows the customer to repay his/her loan faster. Salaried customers can opt for this option who wants to better utilize their monthly

savings to ensure their loans get paid off faster.

Interest savings are adjusted towards reducing loan outstanding. Loan outstanding is reduced by all amounts paid over and above actual interest. Overdraft amount is the net amount deposited by the customer. Loan tenor will come down because of interest savings being applied to loan outstanding

every month.


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CITI HOME ONE LOAN

Upton 30% of the loan structured as a credit line (set on current account) for tenure of upto maximum of 10 years on which the customer pays interest only.

Customers can deposit their surplus funds into the current accountCitiHome Oneaccount to offset interest on the credit lines. These funds can be withdrawn by the

customer for any short term loan requirement.

The credit line ensures that the customer does not have to undergo the hassles of applyingfor a new loan every time he needs funds.

The linked CitiHome One account is more than just a current account .not only is thecredit line set on this account, but it also offers a range of unique benefits and privileges,

backed by a premium banking experience.

Premium banking and financial planning expertise available for the customer to help himgrow his wealth.

Customers can choose from a host of insurance options available to protect their dreamhomes and their families from loan liabilities.

Dedicated relationship manager backed by a team of experts in the fields of investment,insurance, treasury and foreign exchange services.

BORROW SAVE TRANSACT PROTECT MANAGE


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OBJECTIVE OF STUDY

This research project is a study carried out at Citibank . The project consisted of

following two main objectives

To find the utility of home loans in general public and analyze the numbercustomers applying for Home loans in Citi. To learn process of Home loans.

To analyze Citibank as per porters five model .


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REVIEW OF LITERATURE

BUSINESS MODEL-

Citi mortgage functions through three different channels:o DSADirect Selling Agentso S&D- Sales and Distributiono Branch Referralso Cross Sello

Online Applications


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MORTGAGE LOAN PROCESSING

WORKFLOW

DATA ENTRY OF LOANAPPLICATION

CLS/CIBIL CHECK

LOGIN REVIEW(DOCUMENTATION &

PRODUCT RAAC'S) BY CREDITOFFICIER

ALLOCATION TO CREDITOFFICIER

WELCOME CALL (CO),RTV,BTV

CPV (CPV VENDOR),LEGAL ,FRAUDCHECK

FIRST REVIEW

PRE CREDITAPPROVAL CHECK

CREDIT APPROVALBY 2CREDIT MANAGER

PROCESSOR ACTIVITIES

(updating of bookingfees,repaymentschedule,disbursal schedule

and loan agreementsigning)

final reviewloan booking through ALPS


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Key notes

Quick review pre data entry to check required documentation foreach loan application.

Contact point verification and telephone verification conducted toverify the contact details.

Property valuation conducted by an empanelled technical appraiser. Property title check conducted by an empanelled lawyer. Personal discussion with the customer by Bank officer or

empanelled CPA with PD limits to assess repayment capability.

Detailed review conducted for each file before booking to checkdocumentation and eligibility calculation.

Each loan is being reviewed and sanctioned by 2 credit managershaving sanctioning limits as per credit delegation matrix approved

by credit policy.


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FILE LOGIN:

FILE SUBMISSION-

The Sales executives after completing the necessary requirements as per product program ,Know

Your Customer and CIPP requirements takes the file to log in desk for data entry.

DATA ENTRY-

The data entry operator at the desk keys in the data on to ALPS.A FRN (identification number on

ALPS) no is generated for each file data entered on ALPS. The FRN .no is communicated to all

customers through SMS which shall enable them to know their application status at a later date.

CLS&CIBIL INTIATIONS

CIBIL-

Credit Information Bureau (India) Limited (CIBIL)is Indias first Credit Information

Company (CIC) founded in August 2000. CIBIL collects and maintains records of an

individuals payments pertaining to loansand credit cards. These records are submitted to CIBIL

by member banks and credit institutions, on a monthly basis. This information is then used to

create Credit Information Reports (CIR) and credit scores which are provided to credit

institutions in order to help evaluate and approve loan applications. Since its inception, CIBIL

has come to play a critical role in Indias financial system. Whether it is to help loan providers

manage their business or help consumers secure credit faster and at better terms, the use of

CIBILs products have led to a significant change in the way the credit life cycle is managed by

both loan providers and consumers.

Post the FRN generation, in ALPS the file automatically gets uploaded for deduce (cols). The

input data is checked against the following:

Citibank/Citigroup customer database of -o Credit cardso Auto loanso Personal loanso Mortgage loanso Current /Savings accounto CFIL accountso CitiFinancial loans


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RBI negative lists CIBIL check SDN list Rejects uploaded on the system by all the business Negative lists uploaded on the system by RMFCIn case of any change in the customer data, ALPS automatically reinitiate the CLS check.

CIBIL REPOSITORY CHECK

All loan applications are checked on CIBIL repository to identify any instances of multiple

funding against the collateral being offered for the loan.

LOGIN CHECK

The login check involves due diligence for the following:-

o Adherence to RAACs as per the product program. o Minimum documentation requirement as per KYC and CIPP policy.o Any deviation to the above requirements needs to be approved by designated officer.

FILE ALLOCATION

Post successful completion of login check, the file enters into file allocation stage. In this stage

file is allocated to a credit officer for processing. Credit officer on getting the loan applicationneeds to do:

o Welcome Callingo Telephone Verificationo Allocation to third party vendors for following activities-

1. Physical CPV2. Valuation3. Legal4. PD&CPA visit5. Originals seen and returned

CONTACT POINT VERIFICATION


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Contact is established at the customers residential and office address as well as through

phone/mobile number provided in the application form. Third party verification is done

independently. In addition to this, customer business verification is also done.

WELCOME CALL

Call made by the credit officer to explain the sanctioning process to the customer, ratify some of

the basic loan details like amount, rate of interest, tenor as well as to fix appointment for

personal discussion/valuation.

PERSONAL DISCUSSION

o Personal meeting is one of the important and critical activity which attempts to assessability and intention of the customer.

o It is an important feature of the KYC policy of the banko Meetings undertaken by trained bank officers /CPA with approved limits.o Key factor in determining loan sanctioning for big ticket and self employed customers.

CPA VISIT

o Required for all self employed cash out loans greater than Rs 50lakhs.o A site visit is to be done by CPA to the factory /business premises.o The CPA visit is done to review the business activity and provide detailed insight intobusiness capacity and profitability.

LEGAL VERIFICATION

o A legal opinion is required in original from the empanelled lawyer on the propertyoffered as collateral for every loan sanctioned.

o The lawyers are empanelled to post a proper due diligence check and with the approval ofGCG legal counsel.

o Based on the legal opinion a document is prepared which lists out various title documentsrequired to be obtained from the customer for creation of equitable mortgage (SafeKeeping Record- SRK).

o Documents are collected from the customer as per the SKR at the time of disbursal.


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VALUATION

o Property offered as collateral has to be valued by the empanelled value.o The values are empanelled post a proper due diligence check.o A minimum of 2 valuations is necessary for loans greater than Rs 50 laths and property

age>40 years .Variance in the two valuations not to exceed 10% and in case does to be

approved by IAU (Independent Appraisal Unit).

o The valuation report has to be enclosed in original in the booking file.o Each valuation report submitted should contain minimum two photographs showing

1. External view of the building, including the approach road, if possible.2. Internal view of the property.

ORIGINALS SEEN AND RETURNED (OSR)

o It is the process of verifying the genuineness of the copies of the documents submitted toloan assessment by sighting their originals to prevent any fraud in document submission.

o This can be done by1. Citibank officer2. Credit officer3. Personal discussion officer

o This is done before sanction of the loan.RISK MANAGEMENT AND FRAUD CONTROL (RMFC)

o Review of applications is done by independent agency.o The sampling percentage ranges from 10%-15%, in addition to cases where credit

initiation specifically refers cases.

o Types of verificationsProfile check, ITR check, Bank Statement Check, Salary SlipVerification.

o RMFC reports are confidential keeping mind the nature of investigation and source ofinformation.

o A positive report for all files sampled/referred is a mandatory for proceeding withsanctioning of the loan.

BOOKING FEE COLLECTION-

o Booking fee is a nonrefundable fee taken from the customer basis pricing approval-1. Booking fee is collected upfront from the customer before the file is sent for

booking.


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2. Deviations for non collection can be approved only Business Head.3. Booking fees collection is throughCheque / DD.SI is taken only if the account

is operational and regular balances have been maintained.

LOAN DOCUMENTATION-

o Relevant loan agreement to be signed by the applicants.o Loan agreement is adequately stamped.o Has to be in same handwriting and all relevant pages are filled and signed by respective

borrowers.

REPAYMENT INSTRUCTIONS

o Mode of repayment is either ECS (Electronic Clearing system) in case of non CitibankAccounts and SI (Standing Instruction) in case of Citi bank account.

o Repayment is taken from the salary/business account of the customer.o The same is collected at the time of booking and is sent to operations unit as a part of

loan file.

o The EMI payment is always taken on 1stof the month in which EMI is due.DISBURSAL INSTRUCTIONS-

The disbursement schedule is completed in ALPS before the file is marked to home. The credit

officer is responsible for completing the disbursement schedule on ALPS which is also signed

off by the BCC signer. The disbursal schedule contains the following details:

Disbursal date Payee name Location at which the MC/DD should be payable at Bank name and Account no Relationship (e.g. , Seller,developer,take over etc) Tranches


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FINAL FILE REVIEW AND LOAN BOOKING PROCESS

Once the file has been sanctioned and the documentation formalities completed, the file ischecked against the booking checklist to ensure that the loan is sanctioned as per theproduct program and all relevant documents required for booking of the file are in the

file.

The file is then signed off by credit officer and forwarded to 2 credit managers for theirsignature. Once the file is signed by the credit officer and credit managers the file is

uploaded on home system and booked.

The physical file is sent to operations unit where it is checked against the standard checklist to ensure that all documents and approval required are present in the file.

DISBURSAL PROCESS

A disbursal request is initiated only on the request of the customer. On receiving the disbursal

request following formalities need to be completed:

Customer need to get the original title documents verified by the disbursal officer toensure that all the title documents are complete as specified in legal report/SKR.

Once the verification is complete disbursal executive initiates the disbursal request onALPS.

The disbursal is done by operations unit based out of Chennai .On receiving the disbursal

requests operations unit checks the following information before authorizing the disbursal:

Loan number and name on the system matches with the request. Disbursal amount requested matches with the tranche maintained on the system .if there

is an amount mismatch then it is rescheduled.

Payee name requested is checked with the payee name maintained on the system. Booking fee is paid or details are provided in the initiation mail, in case of first disbursal. In case of self construction, if the stage of completion matches with the loan amount

requested as per the grid.

If the customer is currently on loan account. Any other disbursal condition imposed at the time of booking by credit.

In case all the checks are positive, operations unit authorizes disbursal and the instrument is

printed at the bank premises of the respective location.

CERSAI CHARGE CREATION

For all fresh disbursals a charge is created on CERSAI database.


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CERSAI is a database created by NHB where details of mortgage created for each loan needs to

be registered.

STORAGE, MAINTAINENCE AND RECORD MANGAEMENT OF

ORIGINAL DOCUMENTS

An equitable mortgage is created by deposit of original title documents to the bank. Property documents get collected at the time of handover of cheque/ draft. Some

documents are collected post disbursal. Since, as per registration process prevailing in the

country, they are not due for collection at the point of disbursal.

A letter in prescribed format is handed over to the customer as an acknowledgement ofreceipt of documents signed by credit officer.

Documents are stored in fire resistant vaults under dual custody of Citibank officersbefore being transferred to the final storage place.

The unit maintains complete trail of storage and retrieval for these documents.CONCURRENT CALL BACK

For all loans disbursed after 1stDecember 2006, the concurrent call back process is applicable.

The process of concurrent call back is as follows:

The call back is to be conducted by an empanelled officer or lawyer of the bank. The credit/Disbursal team will have to get a call back done on title document packets for

each loan disbursed before transferring them to vault.

The vendor physically checks each loan title document packet and confirms that thedocuments available are in order and sufficient to create an equitable mortgage for thebank.

Vendor will submit the report confirming the documents are checked and discrepanciesobserved.

The credit /disbursal team will on a monthly basis match off the report with final monthend disbursal MIS and do reconciliation between loans booked and callback done. The

reconciliation report clearly states the reason for discrepancies evident.

All discrepancies are reported by the control team on monthly basis and tracked for resolution.


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LOAN ELIGIBILITY

LOAN

ELIGIBILITY

INCOME

WISE

ACTUAL CASH

FLOWS

SURROGATES

PROPERTY

WISE

FAIR MARKET

VALUE

REGISTERED

AGREEMENT VALUE


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INCOME ELIGIBILITY METHODS

INCOME

ELIGIBILTY

METHODS

SALARIED SELF EMPLOYED

NET PROFIT

METHOD

GROSS MARGIN

METHOD

CPA INCOME

METHOD

SURROGATE

INCOME

NRV BASED

CROSS SELL

EMI TO EMI

CROSS SELL


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INCOME NOT TO BE CONSIDERED

INCOME

NOT TO BE

CONSIDERED

AGRICULTURAL

INCOME

UNSURFRUCT

INCOME

MINOR'S INCOME

ONE TIME

INCOME

SPECULATIVE

INCOME


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TARGET MARKET

TARGET

MARKET

SALARIEDSELF

EMPLOYED

SALARIED

CORPORATE SALARIED

GOVERNMENT

OTHERS SALARIED

CONSULTANTS

SELF EMPLOYED

PROPRIETORSHIPS

PARTNERSHIPS

PVT LTD COMPANIES HUF


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CLASSIFICATION

FIRST TIME BUYERS/END USER

SECOND TIME BUYERS

HOME LOANS &

HOME LOAN TAKEOVER

PRIMARY BORROWER WHO IS A BORROWER /COBORROWERIN NIL OR ONLY ONE HOUSING LOAN IN INDIA.

PRIMARY BORROWER WHO IS A BORROWER/CO-BORROWERIN TWO OTHER HOUSING LOANS IN INDIA WITH ANY BANK ORFINANCIAL INSTITUTION,PRIOR TO TAKING CURRENT LOAN

ANY OTHER LOANTYPE WITH CASH OUT

THE PROPERTY COLLATERAL BEING MORTGAGEIS SELFOCCUPPIED.

THE PROPERTY COLLATERAL BEING MORTGAGE IS RENTED/VACANT


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MINIMUM AGE

BORROWER INCOME CONSIDERED INCOME NOT CONSIDERED

MAIN BORROWER 23 YEARS 21 YEARSCO-BORROWER 21 YEARS 18 YEARS

MAXIMUM AGE

TARGET MARKET CRITERIA

SALARIED 65 YEARS AT LOAN MATURITY

SELF EMPLOYED 65 YEARS AT MATURITY KEY PARTNER/DIRECTOR/HUF KARTA WHOS SHARE OF

INCOME IS BEING CONSIDERED, MUST BE WITHIN 65 YEARS

OF AGE AT LOAN MATURITY. OTHER PARTNER /DIRECTOR WHOSE SHARE OF INCOME IS

BEING CONSIDERED NEED NOT SATISFY ANY AGE

RESTRICTIONS AS LONG AS KEY PERSON SATISIFIES THE AGE

CRITERIA .

IN CASE OF A SOLE PROPERIETORSHIP FIRM, WHEREPROPERIETOR DOES NOT SATISFY THE MAXIMUM AGE AT

LOAN MATURITY CRITERIA.

WHERE RENTAL INCOME IS BEING CONSIDERED PROPERTYOWNERS AGE MUST NOT EXCEED 70 YEARS AT LOAN

MATURITY.

COMMON CRITERIA PROPERTY OWNERS/CO BORROWERS AGE TO BE MAX 80YEARS ON LLOAN MATURITY.

ANY EXCEPTION TO ABOVE TO BE REVIEWED BY CREDITPOLICY.


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RESEARCH

METHODOLOGY

UNIT OF RESEARCH

The unit of analysis for this research was the customers of Citi.

LOGIC OF RESEARCH

The research is individualistic in nature as the research was conducted in a particular state.

The research is validation as the prevailing concept has already been researched upon.

RESEARCH DESIGN

This research was descriptive in nature. Descriptive researchis used to describe characteristicsof apopulation or phenomenon being studied. It does not answer questions about how/when/whythe characteristics occurred. Rather it addresses the "what" question the characteristics used todescribe the situation or population is usually some kind of categorical scheme also known asdescriptive categories.

This research was longitudinal. A longitudinal studyis acorrelational research study thatinvolves repeated observations of the same variables over long periods of time often manydecades. It is a type ofobservational study.Longitudinal studies are often used in psychology to

study developmental trends across the life span, and insociology to study life events throughoutlifetimes or generations. The reason for this is that unlikecross-sectional studies,in whichdifferent individuals with same characteristics are compared, longitudinal studies track the samepeople, and therefore the differences observed in those people are less likely to be the result ofcultural differences across generations. Because of this benefit, longitudinal studies makeobserving changes more accurate, and they are applied in various other fields. In medicine, thedesign is used to uncover predictors of certain diseases. In advertising, the design is used toidentify the changes that advertising has produced in the attitudes and behaviors of those withinthe target audience who have seen the advertising campaign.

RESEARCH INSTRUMENT

STRUCTURED INTERVIEWThe instrument for the research was the structured interview wherein the customers had toanswer close ended questions.

SAMPLE SIZEThe sample size of 20 was selected for the purpose of the research.
http://en.wikipedia.org/wiki/Statistical_populationhttp://en.wikipedia.org/wiki/Correlationhttp://en.wikipedia.org/wiki/Observational_studyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Cross-sectional_studyhttp://en.wikipedia.org/wiki/Cross-sectional_studyhttp://en.wikipedia.org/wiki/Sociologyhttp://en.wikipedia.org/wiki/Observational_studyhttp://en.wikipedia.org/wiki/Correlationhttp://en.wikipedia.org/wiki/Statistical_population


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DATA COLLECTION

The data collection for the purpose of research was conducted on both fronts primary datacollection and secondary data collection.

PRIMARY DATA COLLECTION

The primary data for the research was collected through interview of various customers of thebank.

SECONDARY DATA COLLECTION

The secondary data for the research was collected through internet, case studies and intranet ofthe bank.


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ANALYSIS

Analysis has been made for each & every question given in the questionnaire. Mainly analysis

has been done for the sample of 50 covering south Bangalore. This analysis represents only of

south Bangalore & not of whole Bangalore & rest of India. Therefore the findings will show the

picture of south Bangalore only.

To have an in-depth analysis of the sample, the sample of 50 has been classified into 3 groups by

using household income as classification data. Therefore the analysis will not only show the

picture of the whole sample together but it will also show the picture of each group separately

within the sample.

On the basis of analysis, interpretation has been made for the whole sample as well as for each

group within the sample.

Before jumping on to the conclusion, one should know the type of questions being asked & the

options being given, on the basis of which analysis & interpretations have been made.

Type of questions:

Dichotomous questions: options given were:

Agree (it means customer is satisfied)

Dont agree(it means the customer is unsatisfied)

Cant say


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Q.No-3) CUSTOMER SATISFACTION REGARDING OVERALL

SERVICE OF CITIBANK.

Only 52% of the total sample of customers is satisfied with the overall service of Citibank.

SATISFIED

UNSATISFIED


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Q.No-4) CUSTOMER OPINION REGARDING CITIBANKS ABILITY TO

KEEP UP ITS PROMISES.

7.4

3.2

AGREEDISAGREE


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Q.No-5) CUSTOMER OPINION REGARDING CITIBANKS ABILITY TO

MEET ITS CUSTOMERS NEEDS

AGREE

DISAGREE


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Q.No-6) CUSTOMER OPINION REGARDING CITI BANK AS A TRUST WORTHY

BANK.

It shows that about 74% of the total sample of customers agrees that Citibank is a trustworthy bank.

AGREE

DISAGREE


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Q.No-7) CUSTOMER SATISFACTION REGARDING TIME TAKEN FOR LOAN

APPROVAL

It shows that 84% of the total sample customers are satisfied with the time taken for loan approval by

Citifinancial.

SATISFIED

UNSATISFIED


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General Environment Analysis of Trends

There is a strong trend amongst financial institutions to utilize technology to increase

banking efficiency (Hitt, et al, 2011). This is a result of technology being more readily available

and accessible to both business owners and personal consumers. Technology has also become

more affordable. In relation to businesses, as demand has increased, the cost of the technology

has decreased. Additionally, there has been movement within the industry to encourage the use

of electronic payments (Hitt, et al, 2011).

One example of a recent trend is the use of a portable credit card reader for phones,

iPads, laptops, and computers (Square Up, 2012). This device can be used by businesses of

varying sizes, and allows one to take credit card payments without paying monthly fees or high

per transaction rates, or requiring compliance with Payment Card Industry Data Security

Standard (PCI DSS) as no customer card data are stored with the processor (Square Up, 2012). In

a home-based business article, Culp (2011) states that there are an estimated 18.3 million home-

based businesses in the United States, and that number is forecasted to rise. This means there is a

market for the small, portable, affordable card readers in the United States, and potentially

globally.

The electronic payment trend continues as an analysis of Citibanks clientele illustrates

that more consumers are acquiring credit cards and using them on a more frequent basis

(Citibank, 2006). According to Citibanks 2005 financial statements, approximately 36% of

Citibanks global revenue is a result of customer-driven credit card transactions (Citibank, 2006).

Twenty-four percent is based on Citibanks US customers, while the remaining 12% is the result

of international credit card transactions (Citibank, 2006). This is the largest percentage of any of

Citibanks revenue types.


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Another industry trend indicates that while consumers are interested in electronic

payments, they still prefer brand recognition and banking with institutions that can demonstrate a

proven history of financial security (Hitt, et al, 2011). Customers want to have peace of mind

when it comes to utilizing e-banking services.


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PORTERS FIVE FORCE MODEL

PORTER'S

FIVE

FORC E

MODEL

SUPPLIER'S

POWER

BUYER'S

POWER

THREAT OF

SUBSTITUTE

BARRIER'S TOENTRY

DEGREE OFRIVARLY


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Threat of New Entrants

Low / high (exceptions) Existing loyalty to major brands Huge Investments Incentives for using a particular buyer (such as frequent shopper programs) High fixed costs Scarcity of resources High costs of switching companies Government restrictions or legislation There is virtually no chance of a new entrant significantly affecting the major banks'

market share. The only place that new entrants may have a chance in the industry isthrough Internet banking, because of its low cost.

Power of Suppliers

Low to medium There are very few suppliers of particular product categories There are almost no substitutes in some product categories Switching to another (competitive) product is very costly The supplying industry has a higher profitability than the buying industry . Opportunities:

Because of the increasing amount of technology Internet banking will begin toreplace traditional banking, thus cutting personnel costs.

Incorporating investment banking into the banking industry, as some majorcompanies are doing.

Threats: An increase in interest rates causing a decline in bank activity. A collapse of the Fed leading to bank failures, a repeat of the crash of 1929.


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A decline in the US economy leading to a fall in the value of the dollar, thuscausing an instable economy.

Power of Buyers

Medium to High Large number of buyers Purchases large volumes Concentration Ratio is medium being international Information is easily available to the customer Switching to another (competitive) product is simple The product is not extremely important to buyers; they can do without the product for a

period of time

Customers are price sensitiveAvailability of Substitutes

Low to medium Internet If substitutes are similar, it can be viewed in the same light as a new entrant Presence of companies like Western Union, PayPal and Xe.com This is not really an issue within the banking industry, because there aren't really any

legal alternatives, except buying a safe and borrowing from a loan shark

Competitive Rivalry

A highly competitive market might result from: Many players of about the same size; there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth; companies can only grow by stealing

customers away from competitors

Technologically Advanced companies


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Introduction of new products by competitors The banking industry is continuing to restructure and position itself for our

changing economy as a result, many mega-mergers have occurred in recent years.

Citicorp and Travelers Insurance agreed to merge in April 1998 at a value of $70

billion.Bank mergers are usually consummated as a cost-cutting measure but alsoto compete with non-bank providers of financial services.


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SWOT ANALYSIS

According to Hitt, Ireland & Hoskisson (2011), Cititbank was the most global of all U.S.

banks and in 1997 was among the most profitable as well. The changing global environment and

customer needs, however, presented Citibank with unique opportunities and threats. An analysis

of Citibanks strengths, weaknesses, opportunities, and threats provide the following

information:

Strengths:

Strong Brand Recognition

Continuous Investments in Technology

Global Presence

Diversification of Products and Services

Weaknesses:

Declining Capital

Debt Obligations Due to Subprime Market

High Customer Demands

Complicated Products

Opportunities:

Expand Good Reputation Improve Existing Web Features & Expand

Global Banking

Increase Customer Service

Offer Fresh Approach to Banking

Threats:

Competition

Heavy Investments in Technology

Regulatory Scrutiny

Weakening Financial Markets

SWOT

ANALYSIS


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hard look at ways to improve technologies that would embrace and enhance performance.

Citibank also experienced a sharp decline in income levels subject to debt obligations

related to the sub-prime markets (Hitt, et al, 2011). These sub-prime markets strongly impacted

the bottom line profits of Citibank. Investors lost confidence in the financial industry as these

high risk loans escalated out of control.

As customer demands increased, Citibank found it difficult to keep pace with these

requests with less revenue at their disposal (Hitt, et al, 2011). Their lower scale of operations

restricted Citibanks ability to compete within the banking industry, thus limiting opportunities

within the banking environment.

Citibank experienced a weak competitive position that was primarily attributed to

underperformance (Hitt, et al, 2011). Citibank offered inferior products and services, and lacked

the innovation of new products and services that their customers desired. As a result, market

shares continued to decline over a four year period.

Opportunities

Citibanks positive reputation is well known within the global banking industry (Hitt, et

al, 2011). Citibank is focused on enhancing and expanding its good reputation. As a result,

Citibank has the opportunity to leverage its reputation to gain new customers, which will

increase profits.

Expanding global banking is essential in any banking organization. Citibanks product

portfolio could be enhanced by adding new products and services, as well as improving and

enhancing current offerings. Innovative products and services could potentially bring new

customers to Citibank.

Customer service is of utmost importance to Citibank (Hitt, et al, 2011). They want their

customers, new and old, to know they can rely on Citibank to focus on each persons individual

account as they would their own. This is the reason Citibank has made increasing customer


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service of utmost importance.

Citibank is offering a fresh approach to banking. New technologies can provide

Citibanks customers with innovative and efficient accounts receivable, accounts payable, and

liquidity management services to be accessible anywhere, anytime, at the lowest cost (Hitt, et al,

2011). This will be a crucial tool in the success of Citibank.

Threats

As with any industry, competition is always a threat. Citibanks main competitors include

Bank of America, Chase Bank, as well as new entrants into the banking industry (Hitt, et al,

2011). Citibank must be innovative in developing new techniques in which to serve their

customers to remain strong and eliminate competition. Retaining current customers, as well as

attracting new ones, will prove crucial to the financial stability of the organization.

Even though investing in technology is one of Citibanks strengths, it also has the

potential to threaten the profitability of the organization. Developing and providing new

technologies is resource intensive (Hitt, et al, 2011). Whether Citibank simply enhances its

current technology, or purchases new technologies, the budget will be impacted.

Regulatory scrutiny is another threat to Citibanks growth (Hitt, et al, 2011). Banking

regulations change continuously. Staying abreast of these updates and implementing means to

stay in compliance is a resource burden on the industry. Being non-compliant, however, is an

even larger burden.

Weakening global financial markets also pose a threat to Citibanks growth (Hitt, et al,

2011). The declining economy provides an unstable condition that creates stress and fear for all

involved. This includes the banking industry, the customer, and the investors. As long as the

financial markets remain weak, threats to survival will remain.


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RESEARCH FINDINGS

There has been an increase in number of applicants applying for mortgageloans in Citi bank.

The age bracket of applicants has also increased in horizon as the youngercustomers within age group of 30-40 are applying for loans.

CONCLUSION

The report made on CITI Home Loans concludes by findings of various benefits to the customer,government, builders and HFCs / Banks. There is a growing tendency of investing at a younger

age, increase in NRI demand in real estate, increased urbanization, owning property now moreeconomical than renting. Government committed to simplifying Mortgaged BackedSecuritization and Reconstruction of Financial Assets and Enforcement of Security Interest(SARFAESI) Act 2002. There is tax benefit to the customers and rationalization of stamp duty.Builders are now a days focusing onend users rather than Investors and there is improvement inquality of constructions.


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RECOMMENDATIONS

To enable Citibank to partner with the complementary company and provide the loan processing

services to its current customer base, thereby enabling Citibank to also increase customer service

satisfaction and profits, Citibank needs to:

Obtain funding source for start-up fees

Satisfy any legality issues or insurance requirements

Establish the web presence for this joint venture and identify staff who will be

responsible for maintaining the site

Determine accounting procedures of uploading and downloading files including

financial transactions

Develop and implement a marketing plan

Develop an operations plan for the sales department to handle customer inquiries

and order processing

Establish an evaluation metric to annually assess and document Citibanks

Strengths Weaknesses Opportunities and Threats (SWOT Analysis)


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LIMITATIONS

Getting appointments with people was complicated job as most of them were busy and itwas difficult to contact them again and again. Many of them were not interested in giving

interacting

Time constraints have also become a major limitation. As the duration of the project wasnot enough to make our conclusions on such a vast subject which involves in depth study

analysis.

Due to the time constrains the sample size taken for drawing the conclusions was toosmall to get an accurate result and doesnt reflect the whole populations.


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BIBLIOGRAPHY

WEBSITES:

"Top 50 bank holding companies Summary Page".Ffiec.gov. Retrieved 2011-11-02. "Citibank Online Banking".Online Bank Watch. Retrieved 2012-11-20. "Government unveils bold plan to rescue Citigroup".Associated Press. November 24,

2008. Retrieved November 24, 2008.[dead link]

Barr, Colin (March 30, 2010)."Citi repaid its Troubled Asset Relief Program loans inDecember 2010".CNN. Retrieved March 30, 2010.

Citigroup Retrieved 2012-06-08 "Extending our Foreign Commerce".The Independent. Jul 13, 1914. Retrieved August

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