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CHP1. INTRODUCTION OF CITI BANK
1.1 INTRODUCTION
CITI Bank has been known worldwide for being one of the largest
commercial banks, spanning across six continents and over 100 countries.
Together with its 200,000 over employees, it continues to be a major player
in the banking industry. Despite this, due to the constantly changing
environment and also the rapid increase in knowledge workers in the
society, upward potential and mobility for CITI Bank to grow is almost
limitless. As Charles Darwin, father of the theory of evolution, once said, It
is not the strongest species that survives, but the species most adaptive to
change. The same goes to the banking and finance industry.
Therefore CITI Bank must not only be the leading pioneer in
innovation of financial services but it must also be sensitive to the changes
in the current global and local environment. Due to a globalizing world,
competition has increased in the banking and finance sector. This forces
governments worldwide to loosen the regulations concerning this sector
enabling foreign banks to further penetrate into the local market. We can see
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that CITI Bank is exploiting these advantages by establishing four more
branches in peninsular Malaysia. It is expected that local barriers and
regulations will continue to be removed. Therefore CITI Bank should
continue to be on the lookout for opportunities to further reach out into
previously impenetrable target market.
1.2 History of CITI Bank India
Established 109 years ago in Kolkata, CITI Bankhas a long historyin India. Currently it is the largest foreign direct investor in financialservices in India with a total capital commitment of approximately
US$ 4 Billion in its onshore banking and financial services business
and its principal and alternate investmentprograms.
It operates 41 full-service CITI Bank branches in 40 cities and over700 ATMs across the country.
CITI Bank is an employerof choice to about 7,500 people.
1.3 Corporate History
For almost two centuries, CITI Bank has been at the heart of the United
States and the worlds financial system. CITI Bank is one of the few private
institutions that have survived since 1812, through wars, panics, depressions,
good times and bad. One of the keys to this long success has been its ability
to develop innovative strategies to respond creatively and effectively to
opportunities anywhere in the world
.
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CITI Bank Corporate history can be divided into five eras:
The First Era (18121891)
In the 19th century, City Bank served as a common treasury for a group ofmerchants with diverse business interests. By the early 1890s, however, City
Bank was about to become the largest bank in the world.
1812 Authorized capital of $2 million and paid-in capital of $800,
0001813 Paid City Bank first dividend1865 joined the U.S. national banking
system
The Second Era (18921929)
City Bank ride an entrepreneurial burst into the front ranks of world finance
and became an all-purpose financial institution offering a diverse set of
services to a large group of domestic and international customers.
1893 Became the largest bank in the City of New York1894 Became the larg
est bank in the U.S.1897 First major U.S. bank to establish a foreign departm
ent; began foreignexchange
trading.1914 First U.S. national bank to open an overseas branch.
1915 Largest overseas branch network of any U.S. bank1919 First U.S. bank
with $1 billion in assets1928 First major American bank to offer unsecured
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personal loans to consumers1929
became the largest commercial bank in the world
Source: www.mycitistory.com
The Third Era (19301960)
City Bank weathered the Depression and the age of regulation that followed.
1936 First bank offerconsumers checking accounts with no minimum balan
ce1941 Over 1,800 City Bankers served in World War II; 55 lost their lives1945 Handled more than $5.6 billion in U.S. Treasury
securities in a series of War Loan and Victory Loan drives.1956
Installed first computera Burroughs EIOIin commercial loan operations
Source: www.mycitistory.com
The Fourth Era (19611990)
The mid-century era began when CITI Bank introduced the negotiable
certificate of deposit (CD). The CD changed CITI Bank and the entire
banking industry.
1961 Invented the negotiable certificate of deposit (CD)
1965 Entered the leasing business and the credit card business1968 First Nat
ional City Corp. become parent of First National City Bank1974 Citicorp be
came the name of the First National City Corporation1976 CITI
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Bank became the name of First National City Bank1977 Introduced ATMs
for the first time used for more than emergency cash.
1979 worlds leading foreign exchange dealer
a position maintained today1982-
84 S&L acquisitions in California, Florida, Illinois and Washington, D.C195
Introduced Direct Access, linking personal computers in homes & offices19
87 Introduced unique touch
screen automated teller machines in N.Y & HK1989 Became the leading iss
uer of securitized credit card receivables
Source: www.mycitistory.com
The Fifth Era (1991Today)
While the early 1990s were years of deteriorating financial conditions, by
the mid 1990searnings had been restored, dividends reinstated and increased
above the previous high, capital rebuilt, and ratings revived.
Source: www.mycitistory.com
1992 Completed Five Point Plan to rebuild capital, reserves, and earnings19
93 Launched Windows on Risk to assess Citicorps aggregate risk profile1
994 Opened first fully foreign-owned commercial bank in RussiaCelebrated
20th anniversary of the Consumer Banking Group1995Opened first fullservice branch in Beijing, Vietnam and in South
Africa1996 Had largest number of credit cards in Asia CITI Microfinance
Group, CITI in Bangladesh, and other partners, closed on local currency
microcredit securitization for
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BRAC.1998 All Citicorp and Travelers Group divisions merge to become
Citi group2007
CITI losing $8-11billion several days after Merrill Lynch announced
bankruptcy
2007 Charles Prince quit as the chairman and chief executive
of Citigroup2008
Citigroup was forced to seek federal financing to avoid collapse. The US
government provided $25 b & guarantees to risky assets to Citigroup in
exchange for stock.
2009
Citigroup announced that it was splitting into two companies, the idea
behind is Citigroup can dump "the dead weight" on CITI Holdings, allowing
the prime assets of Citicorp to operate away from that of the toxic assets.
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CHP2. COMMERCIAL BANK
A commercial bank(orbusiness bank) is a type of financial
institution and intermediary. It is a bank that lends money and
provides transactional, savings, and money market accounts and that
accepts time deposits.
2.1 The role of commercial banks
Commercial banks engage in the following activities:
processing of payments by way of telegraphic transfer, EFTPOS, internetbanking, or other means
issuing bank drafts and bank cheques accepting money on term deposit lending money by overdraft, installment loan, or other means providing documentary and standby letter of credit, guarantees,
performance bonds, securities underwriting commitments and other
forms of off balance sheet exposures
safekeeping of documents and other items in safe deposit boxes sales, distribution or brokerage, with or without advice, of: insurance,
unit trusts and similar financial products as a financial supermarket
cash management and treasury merchant banking and private equity financing Traditionally, large commercial banks also underwrite bonds, and make
markets in currency, interest rates, and credit-related securities, but today
large commercial banks usually have an investment bank arm.
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2.2 Types of loans granted by commercial banks1. SECURED LOANS
A secured loan is a loan in which the borrower pledges some asset (e.g. a car
or property) as collateral for the loan, which then becomes a secured debt
owed to the creditor who gives the loan. The debt is thus secured against the
collateral in the event that the borrower defaults, the creditor takes
possession of the asset used as collateral and may sell it to regain some or all
of the amount originally lent to the borrower, for example, foreclosure of a
home. From the creditor's perspective this is a category of debt in which a
lender has been granted a portion of the bundle of rights to specified
property. If the sale of the collateral does not raise enough money to pay off
the debt, the creditor can often obtain a deficiency judgment against the
borrower for the remaining amount. The opposite of secured debt/loan is
unsecured debt, which is not connected to any specific piece of property and
instead the creditor may only satisfy the debt against the borrower rather
than the borrower's collateral and the borrower.
2. MORTGAGE LOANA mortgage loan is a very common type of debt instrument, used to purchase
real estate. Under this arrangement, the money is used to purchase the
property. Commercial banks, however, are given security - a lien on the title
to the house - until the mortgage is paid off in full. If the
borrower defaults on the loan, the bank would have the legal right to
repossess the house and sell it, to recover sums owing to it.
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3. UNSECURED LOANSUnsecured loans are monetary loans that are not secured against the
borrower's assets (i.e., no collateral is involved). There are small businesses
unsecured loans such as credit cards and credit lines to large corporate credit
lines. These may be available from financial institutions under many
different guises or marketing packages:
4. BANK OVERDRAFTAn overdraft occurs when money is withdrawn from a bank account and the
available balance goes below zero. In this situation the account is said to be
"overdrawn". If there is a prior agreement with the account provider for an
overdraft, and the amount overdrawn is within the authorized overdraft limit,
then interest is normally charged at the agreed rate. If the positive balance
exceeds the agreed terms, then additional fees may be charged and higher
interest rates may apply.
corporate bonds credit card debt credit facilities or lines of credit personal loans
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CHP3. PRODUCTS AND SERVICES Products and services
CITI offers consumers and institutions a broad range offinancial
products and services, including consumer banking and credit, corporate and
investment banking, securities brokerage, and wealth management.
Citi's franchise in India includes businesses such as equity
brokerage, equities distribution, private banking (CITI Private Bank) and
alternate investments and private equity (CVCI).
3.1TYPES OF SERVICE
1. FINANCIAL 2. BANKING
1. Financial services are the economic services provided by the finance
industry, which encompasses a broad range of organizations that manage
money, including credit unions, banks,
credit companies, insurance companies, consumer finance companies, stock
brokerages, investment funds and some government sponsored enterprises.
As of 2004, the financial services industry represented 20% of the market
capitalization of the S&P 500 in the United States
2. Banking services
The primary operations of banks include:
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Keeping money safe while also allowing withdrawals when needed Issuance of checkbooks so that bills can be paid and other kinds of
payments can be delivered by post
Provide personal loans, commercial loans, and mortgage loans (typicallyloans to purchase a home, property or business)
Issuance of credit cards and processing of credit card transactions andbilling
Issuance of debit cards for use as a substitute for checks Allow financial transactions at branches or by using Automatic Teller
Machines (ATMs)
Provide wire transfers of funds and Electronic fund transfers betweenbanks
Facilitation of standing orders and direct debits, so payments for bills canbe made automatically
Provide overdraft agreements for the temporary advancement of the
Bank's own money to meet monthly spending commitments of acustomer in their current account.
Provide internet banking system to facilitate the customers to view andoperate their respective accounts through internet.
Provide Charge card advances of the Bank's own money for customerswishing to settle credit advances monthly.
Provide a check guaranteed by the Bank itself and prepaid by thecustomer, such as a cashier's check or certified check.
Notary service for financial and other documents Accepting the deposits from customer and provide the credit facilities to
them.
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3.2Other types of bank services
1. Private banking - Private Banks provide banking services exclusivelyto high net worth individuals. Many financial services firms require a
person or family to have a certain minimum net worth to qualify for
private banking services. Private Banks often provides more personal
services, such as wealth management and tax planning, than normal retail
banks.
Capital market bank - bank that underwrite debt and equity, assistcompany deals (advisory services, underwriting and advisory fees), and
restructure debt into structured finance products.
Bank cards - include both credit cards and debit cards. Bank of Americais the largest issuer of bank cards.
Credit card machine services and networks - Companies which provide
credit card machine and payment networks call themselves "merchantcard providers".
2. Foreign exchange services
Foreign exchange services are provided by many banks around the world.
Foreign exchange services include:
Currency exchange - where clients can purchase and sell foreigncurrency banknotes.
Foreign Currency Banking - banking transactions are done in foreigncurrency.
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Wire transfer - where clients can send funds to international banksabroad.
3.Investment services
Asset management - the term usually given to describe companies whichrun collective investment funds. Also refers to services provided by
others, generally registered with the Securities and Exchange
Commission as Registered Investment Advisors.
Hedge fund management - Hedge funds often employ the services of"prime brokerage" divisions at major investment banks to execute their
trades.
Custody services - the safe-keeping and processing of the world'ssecurities trades and servicing the associated portfolios. Assets under
custody in the world are approximately US$100 trillion.
4. Insurance
Insurance brokerage - Insurance brokers shop for insurance (generallycorporate property and casualty insurance) on behalf of customers.
Recently a number of websites have been created to give consumers
basic price comparisons for services such as insurance, causing
controversy within the industry.
Insurance underwriting - Personal lines insurance underwriters actuallyunderwrite insurance for individuals, a service still offered primarily
through agents, insurance brokers, and stock brokers. Underwriters may
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also offer similar commercial lines of coverage for businesses. Activities
include insurance and annuities, life insurance, retirement
insurance, health insurance, and property & casualty insurance.
Reinsurance- Reinsurance is insurance sold to insurers themselves, toprotect them from catastrophic losses.
5. Application and Delivery
CUSTOMER can complete the cardholder application process usingthe Online Card Application (OCA) module within CITI Manager.
Using the OCA module, cardholders enter their demographic
information and submit the form electronically to their manager for
approval. The Program Administrator may add default limits or create
new limits for the account, and then approves the application for
electronic submission to CITI. The OCA module is provided at no
extra cost. Cardholder applications require a signature or authorization
from a CUSTOMER manager or Program Administrator. The online
application process allows for the ability to issue cards within 48
hours of initial application. Faxed applications typically take 72 hours
for fulfillment.
Once CUSTOMERs program is live, we can accept rush applications
via fax. Upon approval, we can request overnight delivery of the card.
We will not charge CUSTOMER for rush applications, issuance, or
delivery. Card Deployment ReportingActivation data will be captured
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in our system and will be visible to both CITI and CUSTOMER via
our reporting tool.
In addition, CITI will create an online dashboard that displays card
activation by hierarchy as shown below. The dashboard will allow
A/OPCs to view the following within their span of control:
Number of cards mailed
Number of cards activated
Cards returned.
6. Emergency and Lost Cards
Cardholders should notify immediately in the case of lost, stolen, or
compromised cards, in order to remove the potential for fraudulent
charges. Once a card is listed as lost or stolen, we may elect to hot
list the card, placing the card on a bulletin that provides a reward to
the merchant for picking up the card if it is presented at the point of
sale.
Emergency card replacement is sent next day via overnight courier,
provided the request is received by 3:00 p.m. (ET).
For non-emergencies, it issue a replacement card within 48 hours of
notification.
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Program Administrators and cardholders can contact Customer
Service to request a new card. CUSTOMER is not liable for
unauthorized charges that occur 17 after the bank has been notified of
the loss, theft, or possible fraudulent use of the card. There is no
charge for the shipping of routine or emergency replacement cards.
7. Card ReplacementFor expedited card requests, you may contact your Client Account
Service (CAS) Manager prior to faxing the application. Your CAS
Manager will facilitate the card replacement process and request
delivery to the location or address specified by CUSTOMER. CITI
has an operational "do not strand" policy, which enables our customer
service representatives to adjust account limits or approve transactions
to ensure cardholders can cover expenses and safely return home.
Bank will do whatever is necessary to ensure CUSTOMERs
cardholders are not stranded. In most cases, we can provide assistance
to adjust the various limits and restrictions on cards to ensure card use
is freely available. In addition, MasterCard has services and easy to
remember phone number to provide assistance as well; 1-800-
MCASSIST. The card associations provide emergency assistance
including various travels, medical, and legal services.
Bank can provide emergency cards for any number of cardholders on
short notice for any centrally billed card program. Emergency cards
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enable CUSTOMER to quickly activate a commercial card within
minutes for crisis and emergency purchasing needs.
The cards have single authorizations and a hierarchy that is separate
from CUSTOMERs standard, ongoing program. Emergency cards
have a preset limit, can be loaded with preset controls as determined
by CUSTOMER, and are delivered in a deactivated state. The cards
can be activated as needed by placing a call to the Voice Response
Unit or Customer Service. Limits can be changed at the time the card
is needed through a call to Customer Service.
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CHP4. CONSUMER
A consumer is a person or group of people that are the final users of
products and or services generated within a social system. A consumer may
be a person or group, such as a household. The concept of a consumer may
vary significantly by context.
4.1There are three contents under consumer : 1. Economics and marketing 2. Law and politics 3. Public reaction 4. Market Share
1. Economics and marketing
The consumer is the one who pays to consume the goods and services
produced. As such, consumers play a vital role in the economic system of a
nation. In the absence of their effective demand, the producers would lack a
key motivation to produce, which is to sell to consumers.
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Typically when business people and economists talk ofconsumers they are
talking aboutperson as consumer, an aggregated commodity item with
little individuality other than that expressed in the buy/not-buy decision.
However there is a trend in marketing to individualize the concept. Instead
of generating broad demographic profiles and psycho-graphic profiles of
market segments, marketers have started to engage in personalized
marketing, permission marketing, and mass customization.
There is increasing backlash from the public over use of the label
"consumer" rather than "customer", with many finding it offensive and
derogatory
2. Law and politics
The law primarily uses the notion of the consumer in relation to consumer
protection laws, and the definition of consumer is often restricted to living
persons (i.e. not corporations or businesses) and excludes commercial
users. A typical legal rationale for protecting the consumer is based on the
notion of policing market failures and inefficiencies, such as inequalities of
bargaining power between a consumer and a business. As of all potential
voters are also consumers, consumer protection takes on a clear politicalsignificance.
In India, the Consumer Protection Act 1986 clearly differentiates a consumer
as consuming a commodity or service either for his personal domestic use or
to earn his livelihood. Only consumers are protected as per this act and any
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person, entity or organization purchasing a commodity for commercial
reasons are exempted from any benefits of this act. Furthermore, Indian case
law has quite a few references on how to distinguish a consumer from a
customer
3. Public reaction
While use of the term consumeris widespread among governmental,
business and media organizations, many individuals and groups find the
label objectionable because it assigns a limited and passive role to their
activities.
3. Market shareThe financial services industry constitutes the largest group of companies inthe world in terms of earnings and equity market capitalization. However it
is not the largest category in terms of revenue or number of employees. It is
also a slow growing and extremely fragmented industry, with the largest
company (Citigroup), only having a 3 % US market share. In contrast, the
largest home improvement store in the US, Home Depot, has a 30 % market
share, and the largest coffee house Starbucks has a 32% market share.
4.2 Retail Banking
Retail banking is banking in which banking institutions execute
transactions directly with consumers, rather than corporations or other
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banks. Services offered include savings and transactional
accounts, mortgages, personal loans, debit cards, and credit cards.
Commercial bankhas two meanings: Commercial bank is the term used for a normal bank to distinguish it
from an investment bank. (After the great depression, the U.S.
Congress required that banks only engage in banking activities,
whereas investment banks were limited to capital markets activities.
This separation is no longer mandatory.)
Commercial bank can also refer to a bank or a division of a bank thatmostly deals with deposits and loans from corporations or large
businesses, as opposed to normal individual members of the public
(retail banking). It is the most successful department of banking.
Community development bankare regulated banks that provide financialservices and credit to underserved markets or populations.
Private Banks manage the assets of high net worth individuals. Offshore banks are banks located in jurisdictions with low taxation
and regulation. Many offshore banks are essentially private banks.
Savings banks accept savings deposits. Postal savings banks are savings banks associated with national postal
systems.
Retail Banking services are also termed as Personal Banking services
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4.3 CREDIT (FINANCE)
Credit is the trust which allows one party to provide resources to another
party where that second party does not reimburse the first party immediately
(thereby generating a debt), but instead arranges either to repay or return
those resources (or other materials of equal value) at a later date. The
resources provided may be financial (e.g. granting a loan), or they may
consist of goods or services (e.g. consumer credit). Credit encompasses any
form of deferred payment. Credit is extended by a creditor, also known as
a lender, to a debtor, also known as a borrower.
Movements of financial capital are normally dependent on either credit
or equity transfers. Credit is in turn dependent on the reputation
or creditworthiness of the entity which takes responsibility for the funds.
Credit is also traded in financial markets. The purest form is the credit
default swap market, which is essentially a traded market in credit insurance.
A credit default swap represents the price at which two parties exchange
this risk the protection "seller" takes the risk of default of the credit in
return for a payment, commonly denoted in basis points (one basis point is
1/100 of a percent) of the notional amount to be referenced, while the
protection "buyer" pays this premium and in the case of default of the
underlying (a loan, bond or other receivable), delivers this receivable to the
protection seller and receives from the seller the par amount (that is, is madewhole).
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4.4 Investment banking
An investment bankis a financial institution that assists individuals,
corporations and governments in raising capital by underwriting and/or
acting as the client's agent in the issuance of securities. An investment bank
may also assist companies involved in mergers and acquisitions, and provide
ancillary services such as market making, trading of derivatives, fixed
income instruments, foreign exchange, commodities, and equity securities.
Unlike commercial banks and retail banks, investment banks do not take
deposits. From 1933 (GlassSteagall Act) until 1999 (GrammLeachBliley
Act), the United States maintained a separation between investment banking
and commercial banks. Other industrialized countries, including
G8 countries, have historically not maintained such a separation.
There are two main lines of business in investment banking. Trading
securities for cash or for other securities (i.e., facilitating transactions,
market-making), or the promotion of securities (i.e., underwriting, research,
etc.) is the "sell side", while dealing with pension funds, mutual
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funds, hedge funds, and the investing public (who consume the products and
services of the sell-side in order to maximize their return on investment)
constitutes the "buy side". Many firms have buy and sell side components.
4.5 Core investment banking activities
1. Sales and trading
On behalf of the bank and its clients, a large investment bank's primary
function is buying and selling products. In market making, traders will buy
and sell financial products with the goal of making money on each
trade. Sales is the term for the investment bank's sales force, whose primary
job is to call on institutional and high-net-worth investors to suggest trading
ideas (on a caveat emptor basis) and take orders. Sales desks then
communicate their clients' orders to the appropriate trading desks, which can
price and execute trades, or structure new products that fit a specificneed. Structuringhas been a relatively recent activity as derivatives have
come into play, with highly technical and numerate employees working on
creating complex structured products which typically offer much greater
margins and returns than underlying cash securities. In 2010, investment
banks came under pressure as a result of selling complex derivatives
contracts to local municipalities in Europe and the US. Strategists advise
external as well as internal clients on the strategies that can be adopted in
various markets. Ranging from derivatives to specific industries, strategists
place companies and industries in a quantitative framework with full
consideration of the macroeconomic scene. This strategy often affects the
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way the firm will operate in the market, the direction it would like to take in
terms of its proprietary and flow positions, the suggestions salespersons give
to clients, as well as the way structures create new products. Banks also
undertake risk through proprietary trading, performed by a special set of
traders who do not interface with clients and through "principal risk"risk
undertaken by a trader after he buys or sells a product to a client and does
not hedge his total exposure. Banks seek to maximize profitability for a
given amount of risk on their balance sheet. The necessity for numerical
ability in sales and trading has created jobs for physics, mathematics and
engineering Ph.D.s who act as quantitative analysts.
2. Equity Research
The research division reviews companies and writes reports about their
prospects, often with "buy" or "sell" ratings. While the research division
may or may not generate revenue (based on policies at different banks), its
resources are used to assist traders in trading, the sales force in suggesting
ideas to customers, and investment bankers by covering their clients.
Research also serves outside clients with investment advice (such as
institutional investors and high net worth individuals) in the hopes that these
clients will execute suggested trade ideas through the sales and trading
division of the bank, and thereby generate revenue for the firm. There is a
potential conflict of interest between the investment bank and its analysis, in
that published analysis can affect the bank's profits. Hence in recent years
the relationship between investment banking and research has become
highly regulated, requiring a Chinese wall between public and private
functions.
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CHP5. CUSTOMER SERVICE UNIT
The Customer Service Unit handles inquiries from merchants, individual
cardholders, program managers, and third parties, while the Client Account
Service Manager supports specific customers and their Program
Administrators. Citis Commercial Card Customer Service Unit can handle
all emergencies, including reports of fraudulent transactions and can be
reached toll-free at (800) 790-7206 in the U.S., or via collect call to (904)
954-7314 if the cardholder is out of the country. Additionally, a designated
fax and e-mail will be provided for use of CUSTOMER cardholders. Ourprimary call center is located in Jacksonville, Florida with major back-up
centers in Norfolk, Virginia and Sioux Falls, South Dakota.
CITI also has call centers in San Antonio, Texas and Irving, Texas.
Customer Service is available 24/7 to handle a variety of inquiries including,
but not limited to:
Balance and payment inquiries x
Credit availability
Decline reasons
Security closures
Account closures
Billing disputes
Reporting lost or stolen cards
Help Desk support for our online systems - 7:00 a.m.11:00 p.m. (ET)
Help Desk support for file delivery issues - 7:00 a.m.11:00 p.m. (ET)
Interface with MasterCard and third party vendors.
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CUSTOMERs designated Technical Implementation Manager provides
technical support for all application interfaces during the initial
implementation period and ongoing service. We provide initial setup and
training for file deliveries and Web-based reporting tools at no cost to
CUSTOMER. Our Technical Help Desk, based in the United States but
available to all Citi Commercial Cards customers, is available from 7:00
a.m. until 11:00 p.m. (ET) to provide technical support. For password resets,
the Customer Service Unit can assist 24/7 via a toll free phone number. The
Technical Help Desk supports: File delivery issues Web-based systems
Technical Help Desk teams are specially trained to provide ongoing
technical support for these processes and systems, as well as to answer any
operational questions CUSTOMER may have.
5.1 Client Account Service (CAS)
Access and entitlements for Customers CitiDirect Global Card
Management System Issuer Program Administrators, CUSTOMER
Program Administrators, and cardholders: All have read and write access for
transaction reallocation CITI Custom Reporting System.
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All external users have read only access at various hierarchy levels. Access
and entitlements for the major roles for Citis online systems .The following
list outlines the access and entitlements for the major roles for Citis online
systems:
Help Desk: Read-only access to minimal client data to support and the
ability to perform user security administration functions such as resetting
user passwords and creating new users
Client Account Services: As this team manages client and Program
Administrator requests, they have the ability to maintain and alter client
profiles and accounts
Customer Service: As this team manages cardholder requests, they have
the ability to maintain and alter cardholder profiles and accounts
Production support: Access to database with read only access (with
exception of Citi Custom Reporting System, where production support have
read-only and update access)
Developers:No access to client data in production
Cli ent roles by applications: Client access is restricted to respective
customer data only:
Reporting Citis Custom Reporting System enables CUSTOMERs Program
Administrator(s) to access, navigate, customize, and explore standard and
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customized reports online at a click of a button or via a scheduler Citis
Custom Reporting Features include:
User-friendly application for generating both standard and customized
reports from over 650 data elements, including Level III and enhanced folio
data
Utilizes drag and drop dynamic report creation and view filtering
technologies
Program wide or organizational/ department level hierarchy based
reporting with account, transaction, and enhanced data drill down capability
Download capability supports spreadsheets, PDF, HTML, and text
delimiters
Ability to save queries in private or public folder to facilitate sharing of
reports
Reports can be pre-scheduled or run on an ad hoc basis
Advanced features include filtering, column calculation using an
expression editor, creation of custom prompts, and on-the-fly charting
capabilities and available in 12 languages.
Web-based reporting for Citis commercial card programs will be provided
on demand at intervals defined by CUSTOMER. Reports can be issued at
the following frequencies, depending on the type of report:
Cycle
Daily
Month end
Quarter
Fiscal quarter
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Semi-annually
Year
Fiscal year.
Historical transaction and card data is maintained for 36 months and
archived up to 7 years. In addition, CUSTOMER can pre-schedule specific
reports to run in the format and time intervals you have defined. Once a
report has run, the user will have the ability to print or export using various
formats (PDF, XLS, .CSV, HTML, or using Text delimiters).
During implementation, CITI will work with CUSTOMER to
determine which reports and formats will be most effective. The following
report formats are available:
Hard copy: If CUSTOMER decides to receive paper reports, we will work
with you to determine the appropriate method for report delivery. However,
as a part of our environmental initiatives, we encourage our customers to
utilize other report formats.
Di rect transmission to mainfr ame: CUSTOMER can receive statement /
billing information directly to a mainframe via FTP or VAN.
I nternet: CUSTOMER will be able to use our Internet-based account
management and information reporting tools as business needs dictate.
E-mail: For security reasons, CITI does not send reports via e-mail.
However, we can provide CUSTOMER with e-mail notification capability.
Reports may be exported to popular Microsoft Office word processing
and spreadsheet applications in RTF, XLS, CSV, TXT, and PDF formats.
Standard files work with many system providers. Specific providers of travel
and expense management systems include IBM, SAP R/3 Enterprise,
Concur, Necho, and Extensity. We will work with CUSTOMER to decide
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which standard file and transmission frequency, whether daily, weekly, or
monthly, best fit your data needs.
CITI has measures in place to ensure the data received from the card
associations is incorporated completely into our GDR, and that no data loss
occurs. Each data file received is checked to ensure it is not corrupted, that it
is complete, and that it is not a duplicate transmission. The data is then
incorporated into the database and, in some cases, cleansed for accuracy.
The CAS teams work in groups of four people that know your account in
detail and are available should your dedicated person be away from their
desk. In total, the Customer Service Team has approximately 44
Intermediate Service Representatives, 12 Senior Service Representatives,
three Operations Assistants, two Recovery Specialists, and eight Collectors.
Four Customer Service Managers and a Collections Manager lead these
teams and oversee the day-to-day activities of the department. All groups
work together to ensure that phones are answered in a timely manner. We
use cross training to enable the service center to handle peaks in call
volumes.
In addition, our Managers, Operations Assistants, and Quality Department
staff answer calls during peak periods to minimize client impact. CITI will
provide 24/7 Client Account Service to CUSTOMER, including weekends
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and holidays. Cardholders and Program Administrators can leverage our
online system 24/7 to access information and perform inquires in real-time.
Citis automated voice response unit (VRU) provides users with a payment
address, enables users to change their PIN, and allows users to hear balance
and available credit information. The VRU system is available toll free,
24/7. We strive to answer all calls in the queue in less than 21 seconds,
which means that callers can expect timely service without long hold times.
CITI has dedicated experienced Customer Service Representatives to
CUSTOMERs card program for all day-to-day Customer Service and
operating support.
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CHP6. BANKING OPERATIONS:
6.1 Front office
I nvestment banking
Corporate finance is the traditional aspect of investment banks which also
involves helping customers raise funds in capital markets and giving advice
on mergers and acquisitions (M&A). This may involve subscribing investors
to a security issuance, coordinating with bidders, or negotiating with amerger target. Another term for the investment banking division is corporate
finance, and its advisory group is often termed mergers and acquisitions.
A pitch book of financial information is generated to market the bank to a
potential M&A client; if the pitch is successful, the bank arranges the deal
for the client. The investment banking division (IBD) is generally divided
into industry coverage and product coverage groups. Industry coverage
groups focus on a specific industry, such as healthcare, industrials, or
technology, and maintain relationships with corporations within the industry
to bring in business for a bank.
Product coverage groups focus on financial products, such as mergers and
acquisitions, leveraged finance, public finance, asset finance and leasing,
structured finance, restructuring, equity, and high-grade debt and generally
work and collaborate with industry groups on the more intricate and
specialized needs of a client.
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6.2 Middle office
This area of the bank includes risk management, treasury management,
internal controls, and corporate strategy.
Additionally, corporate treasury is responsible for an investment bank's
funding, capital structure management, and liquidity risk monitoring.
Financial control tracks and analyzes the capital flows of the firm; the
Finance division is the principal adviser to senior management on essential
areas such as controlling the firm's global risk exposure and the profitability
and structure of the firm's various businesses via dedicated trading
desk product control teams. In the United States and United Kingdom, a
Financial is a senior position, often reporting to the Chief Financial Officer.
Corporate strategy, along with risk, treasury, and controllers, also often falls
under the finance division.
6.3 Back office
1. Operations
This involves data-checking trades that have been conducted, ensuring that
they are not erroneous, and transacting the required transfers. Many banks
have outsourced operations. It is, however, a critical part of the bank. Due to
increased competition in finance related careers, college degrees are now
mandatory at most Tier 1 investment banks.
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A finance degree has proved significant in understanding the depth of the
deals and transactions that occur across all the divisions of the bank.
2. Technology
Every major investment bank has considerable amounts of in-
house software, created by the technology team, who are also responsible
for technical support. Technology has changed considerably in the last few
years as more sales and trading desks are using electronic trading. Some
trades are initiated by complex algorithms for hedging purposes.
Firms are responsible for compliance with government regulations and
internal regulations.
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We encourage Customers to report CITI Banks performance (satisfactory
, unsatisfactory, or exceptional) on this contract. The method for reporting is
through the Vendor Performance Tracking System (VPTS), which can be
accessed online at Vendor Performance Tracking System.
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CHP7. Hierarchy Levels
Citis online reporting systems allow for seven hierarchy levels. This
structure generally provides sufficient reporting hierarchy scenarios to
mirror any organization. Within the hierarchy, CUSTOMER can
include security parameters that will limit access to data for the
Program Administrator(s) to their individual level of hierarchy, or
allow Program Administrators to access all levels of the hierarchy,
depending upon your preference. For example, if CUSTOMER grants
a Program Administrator access at the Entity level, this individual canalso be given access to the Division and Department levels that fall
below the entity level.
Once CUSTOMERs program hierarchy is established, your Program
Administrator(s) will need to identify the hierarchy string when
subsequent cardholder applications are submitted. CUSTOMER can
set up as many centrally billed accounts as needed. These are not
actual card accounts, and cannot have transactions post directly against
them. The corporate billing account is used to roll up all cardholder
spend so that we are able to provide CUSTOMER with a corporate bill
at the end of each billing cycle. This will not in any way cause
duplication. When sending CUSTOMERs ERP daily transaction
reports, only daily postings against cardholder accounts are included
for loading into the application for pre-population. Citis online
systems provide for multiple hierarchy levels.
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This structure is generally sufficient to mirror any organization. Our
online tools can manage user entitlements within a hierarchy structure
that allows access to only that hierarchy node or below. We also can
manage reporting access at the field level by disallowing fields such as
Full Account Number or other personal identifiable information. The
following table presents examples of user entitlements provided within
our system.
7.1 General Ledger Interface
Citis Global Card Management System can interface accounts payable
information into CUSTOMERs General Ledger (GL) system using
automatic mapping and a file of valid GL codes from CUSTOMERs
system. These GL codes can be joined by hierarchy, merchant, or Merchant
Category Code. We can also map the data received from the point-of-sale to
a particular GL code on a daily basis from GCMS or send transactions
directly to CUSTOMERs in-house reconciliation system. Custom file
programming for Outbound (CITI to State Agency) file needs of the State
Agencies.
File integration of data into your internal systems can, in most cases, be
accomplished using Citi's standard file offerings, which includes highly
configurable mappers from our transaction management system. These
mappers are configurable by the end user organization from similar
technology that exists today in the Texas program. CITI has integrated with
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hundreds of public and private sector clients using our standard file offerings
to map to common systems such as SAP, Oracle, and Concur, etc. as well as
"home grown" applications.
CITI will make every attempt to utilize one of these common files for your
program. In the event your requirements include elements not captured in
these standard files and mappers from our transaction management system,
CITI may create unique files through custom development at a rate of up to
$150 an hour. Scoping and estimated cost of the work will be determined
during the implementation process and alternate solutions discussed. All
estimates will be presented to the Comptroller's Office for approval, upon
approval CITI Bank may present to State Entity or Co Op in writing and
their formal approval will be sought prior to any work being performed.
CITI will identify form of payment at the time of estimate.
Citis online reporting and program management systems are available 24/7.
Data files backed upOur File Delivery Help Desk can recreate and redeliver
files should a delivery be lost, destroyed, or corrupted. Data files are backed
up to a media that permits recovery, and we store the programs used to
create archived data to facilitate recovery in the event of a disaster. We copy
files sent to customers and can redeliver them to customers upon request.
Should an emergency arise, CUSTOMERs designated Client Account
Services Manager will provide further support.
7.2 Program Management and Reporting Tools (CitiManager):
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Our single sign-on web-based platform provides CUSTOMER users with a
single point of access to every type of application needed to manage a
commercial cards program.
Robust Reporting: CUSTOMERs users can access consolidated program
data to generate over 3,000 types of customized, ad-hoc, or prescheduled
reports from over 650 data elements.
Efficient Application Process: Citis online application capability allows
users to overlay their organizational structure and automatically route
cardholder applications to the correct approver
Online Statements: CUSTOMERs Cardholders and Program Administrators
have 24/7 access to review statements, download reports, and make
payments within our secure web environment Program Audit Tool Citis
Program Audit Tool (PAT):
PAT is a configurable Web-based data mining and transaction certification
application integrated within Citis Custom Reporting System. This product
is available and customizable for CUSTOMERs card programs. This rules -
based engine evaluates transactions against a series of predefined business
rules, identifying possible exceptions and violations.
Flexibility enables these rules to be applied to specific hierarchies according
to MCC exceptions, dollar thresholds, and other key indicators. Potential
transaction violations are presented for review, explanation as to why they
have been identified as suspicious, and documentation. PAT includes
dashboards for easy interpretation of data and trend analysis, provides drill
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down capability for explanations, and allows notes to be added to
transactions. Reviewed transactions are available in reports for Program
Administrators, supervisors, and managers.
The features and benefits of PAT include:
Ability to review data available after statement cycle
Mining criteria configurable at hierarchy level
One screen overview of review status
Identification, reporting, and analysis of potential card misuse
Ability to flag transactions that are subject to compliance audits based on
predefined rules
E-mail notification to appropriate personnel
Predefined report generation and distribution
Section 508 (user disability) and PCI compliant.
7.3 Program Dashboard
Residing within our CITI Custom Reporting System are our Program
Dashboards. CITI Custom Reporting System (CCRS) already provides users
with access to standard and customized reporting across over 650 data
elements with consolidated global data.
The Program Dashboard tool helps customers in three key areas:
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Program Performance: Credit usage, payments, delinquencies, cards, and
span of control
Spending Analysis: Usage and growth by division; intra-entity
comparisons and benchmarking
Vendor Management: Aggregate spend by vendor, average ticket/room
prices, total and average spend metrics across vendors. 12 Customers can
use the dashboard to access dynamically integrated views of all transaction
data by business unit, cardholder, and vendor; generate metrics and
diagnostics; identify spending patterns, trends, anomalies, and root causes;
zero-in on program exceptions, trends, and data points, and then drill down
into the specific transactions, cardholders, or vendors that account for the
exception or trend; issue real-time alerts based on user-defined criteria and
eliminate unnecessary costs associated with late fees and misuse. Using our
online tools, CUSTOMER can receive notification of spending activity on
established customer limits, and monitor spending by cardholders and
merchants in real time.
7.4 CitiDirect Global Card Management System (GCMS)
It utilizes icons for type of transaction and as indicators for various actions
the user can take. Program Administrators can leverage our online system
24/7 to access, navigate, and explore data to make key business decisions in
real-time, including:
Available credit, current balance, previous balance, current amount due,
days past due
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Disputed amount
Credit limit and cash advance limit (percentage)
Single transaction limit
Client authorizations and declines against the card
Daily, cycle, and monthly number of transactions
Daily, cycle, and monthly dollar amount Program Administrators will also
have the ability to drill down to specific details on spending activity across
the various entities through the CitiDirect Custom Reporting System(CCRS) dashboards.
`Within CITI Direct Global Card Management System (GCMS), the
following fields are updated in real time with account details and transaction
authorizations. Some fields may also be maintained by Program
Administrator(s), and are updated immediately in the system. GCMS also
enables your Program Administrator(s) to request replacement cards.
Controls may be changed at any time via the following methods:
An authorized CUSTOMER representative may contact your designated
Client Account Service Manager via phone, e-mail, or fax.
CUSTOMERs Program Administrator(s) can utilize CitiDirect Global
Card Management System to update a cardholders profile online, including
a variety of controls. Your Program Administrators can also use templates to
change sets of parameters. CUSTOMERs Program Administrator(s) can use
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CitiDirect Global Card Management System to modify controls and perform
routine maintenance, including:
Change and increase transaction limits in real time
Change and increase monthly limits in real time
Review and update the number of transactions per day in real time
Review and update the number of transactions per month in real time
Update address changes
Update name changes in real time
View and / or modify account information, as well as hierarchy and
business unit information
Close accounts in real time
Check client authorizations and declines against the card in real time
View profile information and status of the card
Inquire about accounts and current balances
Change billing and accounting cycles, as needed
Report lost or stolen cards
Execute and manage disputes online.
7.5 CITI Online Statements
Program Administrators: Set up other administrators and cardholders
Cardholders: View and download their data and make payments. In Online
Applications (part of CITI Online Statements); both Program Administrators
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and cardholders have read-write access; for CITI Online Statements,
cardholders have read-only access to credit card data; however, cardholders
can change their personal profile data
7.6 CITI offers liability programs
CITI offers liability programs specifically for protection against misuse of
the card, via MasterCard and provides the additional protections and
limitation of potential entity liability. 13 CUSTOMER is not liable for
unauthorized charges occurring after the bank is notified of the loss, theft, orpossible fraudulent use of the card.
For unauthorized charges made prior to the card being reported lost or
stolen, CUSTOMERs liability is limited to a maximum of $50 per card.
While this is an industry standard, CITI has never imposed the charge on
customers. CUSTOMER is also liable for employee fraudulent charges on
an account with a credit limit over $100,000 in the amount that exceeds
$100,000 (CITI maintains liability for the first $100,000)
7.7 Collection of Individually Billed Accounts:
Anindividually billed/Individual liability account is considered delinquent if
payment is 60 days past due. A delinquency charge of 2.5% of theoutstanding balance is applied if payment is not received by day 60. One
occurrence of bad check/insufficient funds results in account
cancellation/closure. CITI takes the following action regarding past due
accounts: The CITI Bank Collections Department contacts the client by
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phone at approximately 15-20 days after the payment due date, which is 30
days after cycle close. Once client contact is made and a promise to pay is
secured, we allow 10 business days for receipt of payment. If payment is not
received, we contact the client again. This continues through all delinquency
stages.Letters are sent monthly to advise the client of their past due status.
Suspension of charging privileges occurs at 61 days late. Account
cancellation and Adverse Bureau reporting occur at 91 days past due, if the
program is individual liability.
Programs that are joint and several liabilities are not reported to the bureaus,
and an invoice is prepared for the program for all accounts with balances
outstanding at 61 days.
Cardholder payment after suspension, but before cancellation, results in the
opening of charging privileges. CITI utilizes an in-house collections process
for all accounts prior to write-off, which is 180 days past due. Bank reserve
the right to sell accounts that are charged off to a third party agency.
If an account is assumed by a third party after 180 days past due, the
cardholders obligation is legally discharged to the third party, who will be
governed by Federal regulations. We follow the same collection process for
CUSTOMERs active and departing employees, except for the participation
of CUSTOMER. Any funds recovered by the outside collection agency are
posted to the account after the collection agency takes a percentage Assist
Customer's Travel Agents with reconciling travel spend
7.8 Normal Card Application and Delivery
Cardholder applications require a signature or authorization from a
CUSTOMER manager or Program Administrator. The online application
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process allows for the ability to issue cards within 48 hours of initial
application. Faxed applications typically take 72 hours for fulfillment. Only
CUSTOMER Program Administrators will have the authority to approve
card requests and delivery methods.
CITI Bank will ensure the timely and safe delivery of all cards for the
CUSTOMER program. CITI will mail cards according to the need/situation.
CITI mails all cards using mail services with tracking capability.
CITI utilizes overnight signature delivery to ship and track cards to street
addresses. CITI provides bulk shipping for ten cards and over, and will ship
to the address on the account and to alternate addresses when required. In
emergencies situations, CUSTOMER has the ability to apply for cards via a
secure electronic process.
CITI is flexible as to the method of input and collection of cardholder
names and data. CITI can deliver a new card within 24 hours to physical
addresses, if the request is received prior to the daily cutoff time. We have
the ability to deliver cards to a central point of contact or an individual as
specified by CUSTOMER.
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CHP9. CURRENT SCENARIO
9.1 CITI Bank Changes Banking Relationship Packages
CITI Bank announced changes to its banking relationship packages. The
bank said that existing customers will begin receiving notification of these
changes at the end of this month, with the enhancements becoming effective
for all clients in December of this year.
For its Basic Checking package, CITI Bank noted that it will offer three
clear options for clients to get great value and worry-free pricing: 1) Clients
pay no monthly service fee if they make one Direct Deposit and one Online
Bill Payment during each monthly statement period; 2) Clients can also
avoid a monthly service fee by maintaining $1,500 in combined average
monthly balances in their Basic Checking and linked Basic Savings
accounts; or 3) Clients can choose to pay a flat $10 monthly service fee forthe Basic Banking package, which includes more standard features and
services than competitor offerings.
For its full-service and premium checking packages, CITI Bank stated that it
is keeping the choices simple: clients can either choose to maintain a
minimum relationship balance level that recognizes all their savings,
borrowing, and investing activities, or they can pay a competitive monthly
service fee for the expanded features and services these packages offer.
Regardless of which option clients choose, CITI Bank said that it does not
charge additional fees for debit card usage or online bill payments, tools that
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clients consistently say are among the most important for simplifying the
complexities of their financial lives.
CITI Bank said that its position on usage fees reinforces its broader
commitment to give clients the control they need to better manage their
finances, including not allowing any form of opt-in for debit card point-of-
sale and ATM overdrafts, posting transactions from lowest to highest order
for both checks and automated clearing house transactions to reduce
overdraft fees, and not charging for ATM balance inquiries or transfers at
non-CITI Bank ATMs.
Citigroup Announces Senior Management Changes
New York Vikram Pandit, Chief Executive Officer of Citigroup, today
announced several senior management changes to support the company's
business and strategic priorities and to ensure that proper management issecured to lead these efforts.
"Our relentless focus on executing against our strategic priorities at CITI
continues as we remain focused on rationalizing CITI Holdings, and on
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Citicorp as our core operating business," Mr. Pandit said. "We are making
consistent and substantial progress towards these goals. The senior
management changes I am making today will further help in positioning our
company for the future."
Edward "Ned" Kelly, previously Chief Financial Officer, will take on
broader responsibilities for strategy and M&A and will become Vice
Chairman of Citigroup. Mr. Kelly will work closely with Mr. Pandit in order
to drive the execution of Citi's strategic and operational priorities. John
Gerspach, previously the Controller and Chief Accounting Officer of CITI,
will assume the role of Chief Financial Officer.
Eugene M. McQuade will join CITI as Chief Executive Officer for CITI
Bank, N.A. Mr. McQuade most recently served as Vice Chairman of Merrill
Lynch and President of Merrill Lynch Banks (U.S.). Previously, he was the
President and Chief Operating Officer of Freddie Mac and served as
President of Bank of America Corporation.
In addition, Bill Rhodes has informed the company of his desire to reduce
his level of operating responsibility in order to focus more of his time on
Citi's international franchise. He will continue as Senior Vice Chairman of
Citigroup and CITI Bank and will step down as Chairman and CEO of CITI
Bank, N.A. Over the last 50 years, Mr. Rhodes has built invaluable
international experience and relationships on behalf of the CITI franchise.
Also, Gary Crittenden, Chairman of CITI Holdings, has decided to leave
CITI to relocate to Utah to devote more time to his family and other business
interests. "We appreciate Gary's contributions in his various roles and wish
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him and his family all of the best in the next phase of their lives," Mr. Pandit
said.
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CHP10. CONSTRAINTS
Verification laws play a major role in the Banking Industry.
Foreign sector focusing on other investment options.
Banks, which are old, still not introduced to Customer Relationship
Management.
Resources are not being fully utilized. Banks need to set up separate
divisions for taking care of the problems apart from the phone Banking
Services.
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CHP11. FUTURE
One more reason being the opacity of the The Reserve Bank of India. This
does not mean a forecast of doom for the Indian Banking sector the kind that
has washed out south east Asia And also not because Indian banks are
healthy.
Bank still have no clue about the real non-performing assets of financial
institutions and banks. Many banks are now listed that puts additional
responsibility of sharing information. It is now clear that it was the financial
sector that caused the sensational meltdown of some Asian nations like India
Thailand, Indonesia and Korea. Borrowed investment in property in India is
low and property prices have already fallen, letting out steam gently. Our
micro-meltdown has already been happening.
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CHP12. FACTS AND FINDINGS
Market focus is shifting from mass banking to class banking.
Introduction of customized and value added products.
Foreign banks have a major role to play.
Entry of local private players is increasing.
Entry of banks into various other financial products.
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CHP13. CONCLUSION
Still, there are several other worries about the banking sector, mainly
confusion over ownership and control. Sometimes soon India will be forced
to apply the norms of developed countries and many banks (including some
of the biggest) will show very poor returns ratios and dozens of banks will
be bankrupt. When that happens the two popular reasons to defend bad
banks will disappear. These are: one to save face in the remote hope of that
fortunes will revive and two, some banks are too big to be allowed to fail,
fearing social upheaval.
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CHP14. BIBLIOGRAPHY
www.google.com www.CITI Bank.com Times of India Newspaper Banking and Insurance book. Author: O.P. Agarwal
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INDEX
Chapter Particulars Page no
1 Introduction of CITI Bank
1.1 Introduction
1.2 Objective
1.3 History of CITI Bank
1.4 Corporate History
2
COMMERCIAL BANKS
2.1 Role of commercial banks
2.2 Types of loans granted by Commercial Banks
3 Products and Services
3.1 Types of Services
3.2 Other Types of Banking Services
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4 Consumer
4.1
4.3Credit(Finance)
4.4 Investment Banking
4.5 Core Investment Banking Activities
5 Consumer Unit
5.1 Client Account Services (CAS)
6 Banking Operations
6.1 Front Office
6.2 Middle Office
6.3 Back Office
7 Hierarchy Levels
7.1 General Ledger Interface
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7.2 Program Management and Reporting tools
7.3 Program Dashboard
7.4 CitiDirect Global Card Management
System(CGMS)
7.5 CITI Online Statements
7.6 CITI Offers Liability Programs
7.7 Collection of Individually Billed Accounts
7.8 Normal Card Application and Delivery
8 Performance Chart of CITI Bank
9 Current Scenario
10 Constraints
11 Future
12 Facts and Findings
13 Conclusion
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