Citibank launched FD scheme offering option to invest interest in mutual funds

On Wednesday Citibank N.A. launched Citibank Protect & Grow, a product offering customers the safety of a fixed deposit with the option to invest the interest earned into mutual funds. Under this product the customers will get the option to choose any combination of a maximum of four open-ended mutual funds from among those distributed by Citibank.

Citibank Protect & Grow has been designed keeping in the mind the needs of potential investors who aim to obtain returns that are greater than just the interest on the fixed deposit. The product offer is available on a minimum deposit of Rs.15 lakhs for a minimum tenure of 1 year. The fixed deposit interest rates, computed quarterly (simple interest), applicable for Citibank Protect & Grow will be similar to those on Citibank’s vanilla fixed deposits.

Speaking during the launch N Rajashekaran, Country Business Manager, Global Consumer Group, Citi India, said, “In the current environment, wealth preservation is as important as wealth creation. We are very happy to provide our customers with an innovative solution that helps them get more out of their safe money.”

Citibank Protect & Grow works like a Systematic Investment Plan--the interest earned on the fixed deposit is invested every quarter into mutual funds, which helps investors ride over the market highs and lows and averaging out the cost of purchase.

Citibank in association with Travelguru launched Travel Reward platform

Citibank India launched Citibank Travel Rewards for its cardholders in collaboration with Travelguru, India’s largest hotel network and premier travel portal. The reward platform launched by Citibank is first-of-its-kind which will not only fulfill their desire to travel but also earn them handsome reward points and discounts on their spending on hotel and holiday packages. The platform has been hosted exclusively for Citibank Cardholders at www. Travelrewards.co.in.

Some of the major benefits Citibank Travel Rewards offer are:

• Accrual of triple reward points on hotel and holiday package bookings done using any Citibank credit card through Citibank Travel Rewards.
• A unique opportunity for instant online redemption of reward points earned on all Citi-branded cards against purchase of hotel and holiday package bookings.
• Convenience of a dedicated toll-free helpline to consult a travel specialist.
• An assured discount voucher of up to Rs 5000/- on registration at www.travelrewards.co.in.

At the launch ceremony of Citibank Travel Rewards program, Sandeep Bhalla, Business Manager, Cards, Citibank India, said, "With increasing disposable incomes, leisure travel has been on the rise in India and has become an exciting and memorable way for families to spend quality time together. However, due to work commitments and time constraints, customers have begun to seek out holiday planning solutions that give them choice and convenience at their fingertips. This is why Citibank has designed an exclusive program with Travelguru for our card members aimed at ‘enhancing the joy of being with family’. Making the proposition even more compelling and a sure win for our customers is the handsome reward point advantage."

According to Industry research approximately 20 percent of spending on cards is on travel and travel-related purchases.

Ashwin Damera, Founder & CEO, Travelguru.com said, “We are delighted to partner with Citibank, India’s premier bank and the pioneers of the card industry in India. As India’s largest hotel network, Travelguru has been constantly innovating to provide customers enhanced value as well as facilitate a seamless hotel and holiday booking experience. The Citibank Travel Rewards program allows all Citibank credit card customers in India to do smart travel purchases of hotels and holidays through Travelguru. The win-win partnership synergizes the strengths of both organizations: Travelguru’s hotels and holiday expertise with Citibank’s key strengths in consumer networking, universal brand presence and product advancement. It not only benefits the customer with exclusive travel deals but also incentives them with triple reward points on every transaction they make. Also, it allows Citi-branded cardholders to instantly redeem their Citi reward points for hotel bookings, a first-of-its-kind in India.”

Citibank, Reliance Retail plan to get into a joint venture

Citibank a private sector lender and Mukesh Ambani – owned Reliance Retail will be getting into a 50:50 joint venture. Reliance Retail will be distributing Citibank’s consumer finance products such as loans and credit cards. The joint venture will be working as a non-banking financial company (NBFC) with a combined investment of Rs 500 crore.

A senior Citi executive informed Business Standard that both the parties will be investing around Rs 250 crore, whereas the rest of details are being worked out.

“We have already started distributing Citibank’s retail banking products through Reliance Retail. Both of us would have equal contribution to expand the business. We have invested about $62 million in the partnership,” the executive added.

However formal announcement of the deal has to be made, as per sources the joint venture will be initially targeting Reliance Retail’s large customer base, which is approximately around 4 million. Reliance Retail, at present, is having over 1,000 retail outlets across the country.

There is also proposal of launching a couple of new co-branded cards in collaboration. Previously Citi had entered in a joint venture with Maruti Suzuki for car finance in recent months, although the JV’s activities have reduced in recent months.

Reliance is ramping up its retail operations with premium and luxury brands as well as the consumer durables business.

Consumer finance, including loans and credit cards, is one of the fastest-growing segments in the financial services sector. The sector is estimated to grow at a rate of about 30 per cent annually. It is expected that the sector will grow at a rate of about 30 per cent annually. In India the annual credit card spending is in the range of Rs 50,000 crore. Whereas the penetration of credit cards in India is about 1 per cent as compared to a global average of 4.6 per cent.

Although over the past few quarters there has been rise in the delinquencies in the credit card industry.

In an interview Sanjay Nayar, CEO, South Asia, Citi, told Business Standard, “For credit cards, where you actually get industry numbers, the industry average is around 11-12 per cent. Citi is half that number. On unsecured loans too, we are better than the industry. We still have a very good risk management system. We get a lot of signals and we act on it. We are trying to do a multi-product relationship with our customers.”

ABN-AMRO personal loan defaulters rising in the number

ABN Amro Bank’s country executive Meera Sanyal said in Mumbai that there has been rise in the number of personal loan defaulters in its India operations.

"This is a part of the credit cycle, we have to be careful with it. The whole banking sector has to deal with this," Sanyal said.

But she refused to give out the count of the bank's personal loan portfolio in India.

She added in the current economic slowdown conditions the medium term growth will be slow but expects good growth in the long term.

Adding to this Sanyal said by October inflation might touch 13-14 percent but after that it will decrease off.

"Since the oil and commodities prices are falling, in the long run there will be a strong consumer demand," Sanyal added.

Consumers postpone upgrades as inflation takes its toll

Monetary tightening by the Reserve Bank of India to control the sharp rise in prices has checked the march of Indian consumers up the consumer electronics value chain.


Several dealers as well as manufacturers told Business Standard that there is a sharp fall in “repeat” customers that upgrade their buying choices by as much 40 to 50 per cent, it is learnt. Know more about Citibank Credit Card here their all new rewards point and cashback offers which are valid only for some limited time.

“Given the economic situation right now, it is natural that consumers have deferred their purchase or upgrade time,” said Godrej & Boyce Chief Operating Officer (appliances division) George Menezes.

Last year the market for premium air-conditioners recorded a growth rate of nearly 60 per cent. This year, growth has dropped to around 27 per cent. For high-end frost-free refrigerators growth has slowed from 30 to 10 per cent over the past two years.

Premium consumer durables typically accounted for 25 to 30 per cent of sales last year; this year, the proportion has shrunk to 15 to 20 per cent.

However, flat panel display(FPD) televisions, being an emerging category in India, still haven’t seen a significant slowdown.

“Many people have deferred their decision to upgrade to premium products,” confirmed Samsung India Managing Director Ravinder Zutshi, adding: “The sentiment to upgrade exists but the current economic conditions have led to a delay in purchases.”

“Many second-time buyers who wish to upgrade come and inquire about the discount or finance schemes available but since neither option is available they choose not to buy,” said a Delhi-based dealer, unwilling to be identified, adding: “The sale of high-end products has suffered the most in this situation.”

Over the past few years, customers in the Rs 32,000-crore consumer durables market had been upgrading at a fast clip. In televisions, the market had moved from curved screens to flat screens and there were signals that it would now move to LCDs. Customers also rapidly migrated to high-end fridges, washing machines, microwave ovens and air-conditioners.

But the speed of this upgrading has now decelerated. According to sector expert Harish Bijoor Consults Inc CEO Harish Bijoor, the inflation spiral and the lack of easy availability of consumer finance have created a definite “postponement of purchase syndrome” in the durables market.

Not only have interest rates gone up sharply in the last few months, several consumer finance companies have stopped lending for purchase of consumer durables. With GE Money, ICICI Bank and Citibank now out of the segment, only Bajaj and Shriram are left in the field, apart from the smaller in-house lending from dealers.

Naturally, consumer durable makers are worried. “Fewer financing options will have a definite bearing on sales,” said LG Electronics India Director (marketing and sales) V Ramachandran.

“Manufacturers will definitely have to re-look their pricing if they want sales to pick up, otherwise they will have a big inventory pile-up to deal with. They will then also need to look at newer ways of liquidating inventories,” added Bijoor.

Even as the industry gears up for the upcoming festival season, most companies are wary of what lies ahead. “The impact on the bottom line is evident but the top line is still not under stress. But we are concerned about the uncertainty that lies ahead,” said Ramachandran.

Where is Citibank headed in India?

He’s just finished a meeting with the promoter of a large Indian corporation who wants to raise half a billion dollars and is sitting in his 5th-floor office in Mumbai’s Bandra-Kurla commercial complex. “Business is flowing in for us,” says Sanjay Nayar, the dapper 46-year-old CEO of Citigroup’s Indian operations and Area Head for Bangladesh, Nepal and Sri Lanka.

The spacious room has a busy air about it and is cluttered with dozens of coffee table books but that doesn’t seem to bother Nayar, who is squeezing in meeting after meeting into his busy day. A client here, a colleague there, a couple of exit interviews… Get the latest updated citibank fixed deposit rates to select the best tenure plan for making some good profits.

Nayar’s just back from a meeting with Citigroup’s global CEO, Vikram Pandit in Citi’s New York headquarters, where things are far more down-tempo than they are here in India. There Pandit, 51, who took charge at the bank in December 2007, is grappling with the onerous task of restructuring Citi’s global balance sheet.

The biggest bank in the US has been hit hard by the subprime crisis with losses and writedowns mounting close to $50 billion since mid-2007. What’s scaring Citibankers in India and elsewhere is Pandit’s declaration that he wants to sell assets worth $400 billion over the next three years. Recently, the bank sold its German banking operations for $7.7 billion to France’s Crédit Mutuel and speculation is rife about a possible offloading of Citi’s non-core assets in Japan.

Back in India, Nayar, too, has his plate full, although Citi’s Indian operations are far better off than what its global situation looks like. Still, his troubles are irksome. Recently, three key Citi executives left the bank—Rajesh Mayani, Director of institutional sales, Ratnesh Kumar, head of research and Narayan Mulchandani, director (sales), in Hong Kong, signed up with a local Indian stockbroking firm, Anand Rathi Securities. Besides these, two others, Anil Gudibande, director and Ashish Pitale, director, global banking, moved to AIG Private Equity and Deutsche Bank, respectively.

Citigroup may sell its India HQ

The subprime mortgage market collapse of last year may have an impact on one of the landmark buildings in the Bandra Kurla Complex (BKC). According to real estate market sources, the New York-headquartered Citibank, which has been hit hard due to the crisis, is believed to be actively considering to put its eight-storey tower Citigroup Centre on the block.

When contacted, a spokesperson refused to comment and said the organisation does not discuss these issues with the media. However, reliable sources told TOI that since the past few months word is out in the property market about the imminent sale of Citigroup Centre. With close to 2 lakh sq ft of built up area, the building could fetch anywhere between Rs 500 crore to Rs 800 crore, according to a market estimate.

Those in the know said that after hiving of this prime BKC property, the bank will lease back the same premises. In February, Citigroup had completed a deal in this fashion with its building in Tokyo, Japan. The transaction was, what is called, a sale-and-lease back deal of the Citigroup Center in the Shinagawa district of Tokyo. Citigroup sold this building to its rival Morgan Stanley in a deal reportedly worth $445 million (approx Rs 1,800 crore).

It was almost a decade ago that Citibank moved its main offices from Nariman Point to the BKC. This decision to relocate led to heads rolling — two senior officials in Mumbai were sacked after top bank officials from New York found the BKC location completely desolate and inappropriate. This was in the late 1990s when BKC was yet relatively undeveloped and the top bankers from the US found it sacrilegious that their counterparts in Mumbai had thought of shifting away from Nariman Point, the numero uno commercial district.

The Citibank has been shedding its real estate (mainly apartments) all over the country. In the past one year, it has sold more than half a dozen flats in Mumbai alone.

These include a flat each in Meher Apartments (Altamount Road), Kanti on Mt Mary Road in Bandra, Hormuzd off Carter Road, NCPA Apartment at Nariman Point and as many as five apartments at Harbour Heights building, Colaba.

Citi plans to overhaul bonus system

India-born Vikram Pandit led world's biggest bank Citigroup is planning to overhaul its bonus system, aimed to increase co-operation and minimise in-fighting among disparate parts of the conglomerate, a media report said.

"Citigroup is planning to overhaul its bonus system for hundreds of top managers in an effort to increase co-operation and minimise in-fighting among the disparate parts of the sprawling financial services conglomerate," the Financial Times reported.

Citi, which has incurred losses of about $15 billion in the past two quarters, is expected to witness further billions of dollars of write-downs, related to the subprime crisis.
Recent media reports said that Citi would slash 10 per cent of its 65,000-strong investment banking workforce globally.

According to the Financial Times, the move is part of Pandit's plan to restore the group's battered fortunes by harnessing synergies between its investment banking, commercial banking and wealth management divisions.

The Financial Times said that Pandit has rebuffed calls to break up Citi and vowed to eliminate barriers between the firm's businesses to fully exploit its universal banking model.

Quoting a Citi executive, the newspaper said, "The new compensation plan is absolutely crucial to put teeth behind Vikram Pandit's strategy," and added, "We have to put a premium on partnership-like behaviour."

Further, quoting people close to the situation, the UK daily noted that Pandit wanted to change the way bonuses were calculated to reward co-operation across different divisions and the performance of the company as a whole.

Citibank Launches Citigold Global Banking

Citibank today announced the launch of Citigold Global Banking, a premium Banking and wealth management service exclusive to Citigold clients. The new Citigold Global Banking program takes financial mobility to a whole new level by enhancing the banking experience for Citigold clients not just in India but also around the world. This initiative leverages on Citi's strong worldwide presence to offer cross-border banking products and services to internationally mobile Citigold clients. India is among a select group of countries in the Asia Pacific region where this service has been launched today.

Citigold is Citibank’s wealth management business for its mass affluent client segment that provides a holistic suite of both retail banking and wealth management products and solutions that include investments, insurance, mortgage, business banking, retirement planning, succession planning and wealth transfer. Today, Citibank serves over 400,000 Citigold clients in Asia Pacific (ex Japan), underscoring the global financial institution’s leadership in the wealth management space.

As the economy and business environment in India continues to grow, professionals, entrepreneurs and investors in the region have more financial interests today that span multiple countries and currencies. The trend of Indian talent taking on additional job responsibilities that result in expatriate or overseas assignments also continues to rise. Often, simple and routine transactions such as opening a bank account, remitting money, buying a house, taking a loan in case of emergencies become complicated in foreign lands. Citi has estimated that, on average, the mass affluent segment in Asia Pacific is growing at about 15% on an annual basis.

“Today we live in a global village. As the world gets smaller, the needs of affluent clients get bigger. When people travel from country to country, a big area of concern is the loss of their ‘home’ banking relationship, their credit history, and easy access to their accounts from anywhere in the world. Citi understands that situation, which is why we developed a global ‘passport” through Citigold Global Banking to address our clients’ needs anytime, anywhere,” said Mr. T. R. Ramachandran, Head, Retail Banking, Citibank N.A., India.

Citigold Global Banking provides an easy transition for clients, enabling them to open bank accounts, get credit cards, enjoy Citigold status worldwide, transfer funds conveniently and gain access to a powerful global network of branches and ATMs with emergency cash withdrawal facilities. This service is further facilitated through Global Support Centers and a Global Banking Website that allows a snapshot view of all accounts and relationships that the client has with Citi around the world.

Mr. Sameer Kaul, Head, Branch Banking, Citibank N. A., India added, “Our Citigold clients lead busy lives and they expect transactions, particularly cross-border financial transactions, to be faster, safer and more convenient than ever before. Citigold Global Banking is able to deliver on all these areas. Our clients’ local banking will now seamlessly merge with their global banking requirements. These are the advantages of Citi’s global reach, scale, and expertise.”

Citigold Global Banking Benefits

-- Pre-Arrival Account Opening – Before the Citigold client reaches a foreign country, Citi will be able to start the account opening process and in most cases even have the accounts opened before the client reaches the foreign shores, depending on the regulatory norms in the foreign country. Using a client’s credit history, Citigold relationship managers can also help them open a credit card account for immediate access to credit upon arrival.

-- Global Support - Citigold clients have access to logistical and emergency support through an unparalleled network of more than 4,000 Citibank branches in 43 countries. Citi has also established four Global Support Centers in Europe, Asia, North and South America with teams of specially-trained staff members able to offer personalized cross-border account opening assistance to Citigold customers through the entire application process.

-- Global Recognition - Citigold clients can transfer their Citigold status from country to country, whether relocating or traveling, to enjoy the privileges, recognition and status they are accustomed to.

-- Citigold Center Access – Access will be provided at over 550 Citigold Centers in 36 countries, including lounges and meeting rooms, as well as free use of telephone, fax and the Internet services.

-- Emergency Cash Withdrawal – In the event of emergencies, and subject to proper verification, Indian Citigold customers can obtain the equivalent of up to US$2,000 from their accounts, at the designated Citi branches overseas.

-- Toll-free Global Hotline (800-CITI-CODE) – Indian Citigold customers traveling abroad can contact their home Citigold Customer Service hotline via a single toll-free, global number to request assistance with their accounts.

Citibank launches Citigold Global Banking

Private sector lender Citibank on Monday announced the launch of a banking and wealth management service Citigold Global Banking for its Citigold clients.

The service would enhance the banking experience for Citigold clients not just in the country but also around the world, a release issued here said.

"When people travel from abroad, a big area of concern is the loss of their 'home' banking relationship, their credit history, and easy access to their accounts. Citigold Global Banking is a passport to address our clients' need anytime, anywhere," Citibank's Head (Retail Banking), T R Ramachandran, said.

It provides an easy transition for clients, enabling them to open bank accounts, get credit cards, enjoy Citigold status worldwide, transfer funds conveniently and gain access to a global network of branches and ATMs with emergency cash withdrawal facilities.

It is further facilitated through global support centres and a global banking website that allows a snapshot view of all accounts and relationships that the clients have with Citi around the world.

Citi India not to sell any arm, to strengthen presence

Amidst speculations that Citi India would sell one of its subsidiaries in India, the company today ruled out closing down any of its arm and said it would rather strengthen its presence in the country.

"We are not closing any arm, on the contrary we will make investment in the country," said CitiIndia Country Business Manager (Global Consumer Group) P S Jayakumar.

The consumer finance business is growing at a rate of 25-30 per cent and the company has made an investment over Rs 400 crore during the year ended March 2008, he said.

Jayakumar said the group is committed and would continue to invest in the business in the country He added that reports of selling are speculative.

The statement assumes significance as there were reports that Citi India was looking at selling commercial vehicle finance business in line with its global asset sale strategy to raise capital to tide over losses posted in the first quarter.

Globally, Citigroup reported USD 5.1 billion dollar of loss for the first quarter ended March 2008 mainly due to the sub-prime related direct exposures in fixed income markets and highly leveraged finance commitments.

Last month, Citigroup Inc Chairman Win Bischoff, however, had said the group sees substantial growth opportunities in India.

"India is an important country for our international business strategy. It is one of our largest, most complex and organically grown markets but we are also committed to being a partner in the cooperative spirit of improving the lives of people in the communities where we live and work, Bischoff had said.