Citi Commercial Bank Newsletter

Tushar Vikram

Dear Client,

It’s my pleasure to bring to you the latest edition of the Citi Commercial Bank quarterly newsletter. The newsletter is a

summary of recent regulatory developments, client event updates and showcases our key products and client case studies.

The last quarter has been an exciting one for us and I am happy to announce that Citibank took home multiple awards.

I am pleased to inform that Citi India has been awarded the Best Service Provider in Risk Management at the Asset

Triple A Treasury, Trade and Risk Management Awards 2015. Also, Citi India was recognized as the winner for Enhanced

Customer Experience at the IBA Banking Technology Awards 2014-15. Most recently, Citi received the Golden BRICS

rdAward, at the 3 annual ‘Doing Business with the BRICS’ Conference in Washington DC, recognizing us as one of the top

companies doing business in BRIC countries.

These accolades are a tribute to your active support and confidence vested in our teams to deliver remarkable, service

and products to suit your specific needs.

We look forward to continue our work as your trusted partner and commit to adding more value to your business. I do

hope you will find this edition interesting and look forward to your suggestions and feedback.

Tushar Vikram

Head - Commercial Bank,

Citibank India

Warm regards,

Product Showcase

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How it works?

Smart Recon is connected to customers via secure channels. On sharing the distributor details and

open invoice details, Citi initiates a Smart Recon setup for you. Our processing engine browses the

invoice information, sorts and sends out interactive PDFs with complete invoice details to each of your

distributors.

Unique features

Ÿ A user-friendly & interactive interface based in PDF format for your distributors to make remittances

to you using multiple modes with a unique transaction reference generated.

Ÿ The product platform enhances information sharing and collection capabilities, while providing

reconciliation support at both ends of the transaction.

What is Citi Smart Recon?

An interactive & integrated collections solution powered with hassle-free reconciliation & tracking

features which allow you to streamline inflows from multiple distributors.

Smart Recon - a smart offering which helps your company to automate account receivables processes,

garner remittance information and reconcile collections against multiple invoices.

Citi Smart Recon

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Product Showcase

Benefits for You

Ÿ Eliminates nuances of collecting remittance data - now collected from distributors

Ÿ Revitalize your supply chain with product bundling on credit financing

Ÿ Instantly update distributor database anytime using secure information channels

Ÿ Receive auto reconciled reports and processing updates

Benefits for your Distributors

Ÿ Get pre-populated interactive PDF on registered email with complete invoice details and due date

Ÿ Flexibility to allow partial remittance using multiple modes

Ÿ Receive alerts on deposits

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Product Showcase

Citi Smart Recon Process Flow

A brief schematic on the various features offered to customers and distributors:

Customers share specific distributor data & invoice

information with Citi via a secure delivery channel.

Citi stores this information on its Smart Recon

platform.

Distributor

Profile

Open Invoices

Customers

Customer

ERP System Citi Smart

Recon

Distributors receive interactive PDF as an email

attachment and choose what and when to pay

amongst a list of invoices.

Distributorsverify

information tosubmit and

receive depositslip

Distributors

Distributors

choose to

pay and clear

invoices on

PDF

Citi Smart

Recon

Smart Recon stores the receivables information,

compiles and generates an interactive PDF to be

delivered to the distributors directly via email.

Delivers PDF

as an Email

attachment

Information Processing

Compiles

information

into pre-

populated

PDF

Citi Smart

Recon

Smart Recon scrutinizes remittance data against the

invoice information and pushes reports to customers

and reminders to distributors for due payments.

Remittance Processing

Send Reports to customer

& Reminder

to Distributors

Receive open

invoices

& actual

remittance

data

Citi Smart

Recon

Client Case Study

5

Signode India Ltd

About the client:

Background:

Signode India is a company

based out of Hyderabad engaged in the

business of manufacture of steel products used

for bundling, packaging and strapping steel in

the process of transportation and logistics. The

company has a strong presence in the industrial

packaging market and is well known amongst

steel companies and steel distributors alike.

One of the key raw materials for

the company is steel and the procurement plan

for this is laid out at the beginning of every year.

The company had been procuring steel from

various large steel companies in India. Most of

the contracts between the steel majors and

Signode are long term in nature and cover

multiple shipments over a finite period of time.

Client Asks: The management of the company

was keen to improve cash flows of the company

and had been thinking of moving to payment at

sight after receipt of goods. However the

company was wary of a potential increase in

prices which could disturb their margins as

their customers are also the same steel

suppliers who would not be willing to take any

price increase by Signode.

Their businesses being intertwined, there was

a need to formulate a procurement strategy

that would not impact the manufacturing

process and margins. The company sought

advice from Citi on extending their payables

cycle through a trade structure.

Client Case Study

Citi’s solution: Given that Signode regularly

procures steel from 3 or 4 large suppliers in

India, we suggested revolving LC issuance in

favour of these suppliers who in turn could

discount the instrument with their bankers.

Moreover, a revolving LC would help in reducing

the clerical work at Signode’s back end which

would otherwise involve opening multiple LC’s,

tracking their maturity dates, matching

procurement plans with delivery schedules and

delivery dates of material.

We explained the benefits of this structure

where in the LC could get reinstated to its

original amount once its original value had

been exhausted (i.e. upon delivery of goods of

that value). Our solution helped the company

have a single instrument covering multiple

shipments over a longer period of time.

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Client Events

7

Knowledge Sharing Session for Intermediaries

Venue : Courtyard Marriott, Pune

Dateth: 21 May, 2015

Amit Chhawchharia, Deputy Head –

Corporate Sales & Structuring, shared a

perspective on the Macro Economy with

specific insights on GDP forecasts, current

political environment and financial markets.

The final session on M&A Escrow Structures

was conducted by Sumit Khanna, Head –

Issuer Services Sales covering unique

escrow structures and case studies. The

session concluded with a thank you address

from Anand Panda, Intermediaries Strategy

Head. This Session further established Citi

India as a thought leader amongst

intermediaries, which is a strategic coverage

area for CCB.

All the speakers took some time out at the

end of their respective sessions to interact

with the participants and answer their

queries. The workshop concluded with

cocktails and dinner at the venue.

Citi Commercial Bank and Citi Corporate

Sales & Structuring jointly hosted a

Knowledge Sharing Session in Pune,

intermediaries including Law and Chartered

Accountancy Firms. This was a first of its kind

session conducted by any bank in Pune with

focus on intermediaries. The event saw a

good turnout of around 25 esteemed guests

from firms like AZB Partners, E&Y, PWC, SKP,

etc and a few prospects.

Leena Aich, Regional Head – Liabilities, West

welcomed the participants and gave an

introduction to Citibank India as well as Citi

Commercial Bank, which was followed by an

engaging session on FEMA – Regulations &

Reporting by Ritesh Gorewar, FTU Regulatory

Reporting – Capital Account Transaction.

Client Events

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Cross Company Client Forum

Venue : Courtyard Marriott, Gurgaon

Dateth: 20 March, 2015

Theme : Go Digital & Save Money – Leveraging the digital marketplace

Founder, Power2SME.com. While, Mr. Ranjeet

introduced the attendees to MMT’s recently

launched B2B Corporate ticketing platform,

Mr. Narayan highlighted the features offered

by Power2SME’s procurement platform,

which caters to SMEs in the manufacturing

sector. The attendees took away several tips

for effectively leveraging digital technology

for delivering efficiency. The interactive

speaker session was followed by a networking

dinner at the venue.

Citi Commercial Bank - India, organized a

speaker series on the theme of ‘Go Digital &

Save Money – Leveraging the digital

marketplace’ in association with Make My Trip

and Power2SME.com. The event was attended

by select clients of each host, who were

enthused to know about cost save

opportunities through increased digitization

across banking, travel and procurement. The

speakers included Mr. Tushar Vikram, MD and

Country Head, CCB India; Mr. Ranjeet Oak,

Sr. Vice President and Head of Flights Business,

Make My Trip; and Mr. R Narayan, CEO and

Key Regulatory Updates

The key regulatory updates during the period November, 2014 to February, 2015 are as follows:

Exports - Realization Period

Ref: RBI Circular A P (DIR) 37 dated November 20, 2014

RBI has clarified that the period of realization for exports is 9 months for all exports. This includes exports

by SEZ units, Status Holder Exporters, EOUs, and units in EHTPs, STPs and BTPs.

A1 forms for Imports: Dispensation

Ref: RBI Circular A P (DIR) 76 dated February 12, 2015

RBI has dispensed with the requirement of importers submitting A1 forms for imports into India, subject to

AD Banks obtaining all requisite details from importers.

Export Advances: Reporting to RBI

Ref: RBI Circular A P (DIR) 74 dated February 09, 2015

In a step towards tracking and reducing the number of outstanding export advances, AD Banks have been

directed to report export advance cases (outstanding beyond the stipulated period) to RBI on a quarterly basis.

External Commercial Borrowings (ECB) changes – Simplification of Procedure

Ref: RBI Circular A P (DIR) 64 dated January 23, 2015

Under revised ECB guidelines, ADs may now approve all cases of

Ÿ Changes in draw-down / repayment schedules, including changes in maturity period and all-in cost

Ÿ Reduction in ECB amounts, irrespective of number of occasions

Ÿ Increase in all-in cost, irrespective of number of occasions subject to the revised terms conforming to

ECB guidelines and carried out during the tenor of the ECB.

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Disclaimer:

Nothing in this News Letter is an offer, invitation to offer, commitment or agreement on the part of Citibank or on the part

of any Citibank entity, including to prepare, negotiate, execute or deliver any product/s, service/s, arrangement/s,

lending or subscription and does not give rise to any liability or obligation on the part of any Citigroup entity. Not all

products and services are necessarily applicable to all prospects / customers or available at all locations or at all times.

All products and services are subject to the provisions of the applicable laws and regulations and Terms and Conditions

applicable from time to time. Availability and issuance of products and/or services is also subject to, among other factors,

where relevant, such due diligence as may be required by Citibank, an offer being made by Citibank and an acceptance of

that offer, internal approvals and external approvals (if any) and the customer meeting regulatory as well as Citibank's

internal policy requirements. This News Letter is merely descriptive of various products that are currently available.

Terms and Conditions, without limitation, the nature of products and services, rates operational particulars etc., may be

modified or supplemented by Citibank for its products / services in its sole discretion at any time and from time to time

including during the course of a due diligence and/or credit approval process or as a result of changes in market or

economic or other relevant conditions or criteria otherwise (including the absence of any material adverse change in the

financial markets or in the financial condition, operations or prospects of relevant persons).

For more information on the awards, please visit www.dnb.co.in, www.cii.in, www.paulwriter.com, www.thesundaystandard.com

and Global Finance (www.gfmag.com).

Prior to availing of any products or services or entering into any transaction including a borrowing, subscription or

Investment ("Transaction/s"), you should determine, without reliance upon Citibank or its affiliates, the economic risks

and merits (and independently determine that you are able to assume these risks), as well as the legal, tax and

accounting characterizations and consequences of any such transaction. Please note that neither Citibank nor any other

Citigroup entity is in the business of providing legal, tax or accounting advice.

All products and services are at the sole discretion of Citibank and subject to RBI / FEMA / SEBI / Other regulatory

guidelines issued from time-to-time.

Citibank and Citigroup entities work within the regulatory framework of India and US.

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