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Vikram Pandit to lead JM Financial's non-banking financial company

MUMBAI: Vikram Pandit, the former chief executive of Citigroup who was ousted after losing a power struggle with the bank's chairman last year, will lead a proposed bank that his long-time friend and ace rainmaker Nimesh Kampani of JM FinancialBSE 13.38 % plans to set up. Global funds raised and managed by Pandit will also invest up to $200 million in the JM Group's various businesses, the Mumbai-based company said in a statement.
Pandit, 56, will acquire 50% stake in JM's non-banking financial company (NBFC) and buy 3% stake in the parent company, it said.

Pandit led Citigroup from December 2007, successfully steering the bank through the depths of the 2008 finance crisis before resigning under dramatic circumstances on October 16, 2012, as he had lost the confidence of his board. He was earlier with Morgan Stanley, where he was president and chief operating officer of the investment banking business.

JM Financial, a financial services company, will nominate Pandit to the position of non-executive chairman of the proposed bank, if it were to obtain a licence from RBI, as well as its NBFC. Pandit and Hari Aiyar, a colleague of Pandit from his Morgan Stanley days, will have the right to purchase shares up to the amount prescribed by RBI in the proposed bank, JM Financial said. ET NOW broke the story on Thursday evening.

The Reserve Bank of India is in the process of issuing new banking licences for the first time in a decade. JM will be one among many aspirants and there is no certainty that it will be successful. However, RBI is said to be keen to grant one or two banking licences to banks helmed by professionals and Pandit's induction may help JM's chances.

The central bank will form a committee later this year to scrutinise the applications and a decision will be based on the recommendations of the committee. RBI has made it clear that even if an applicant qualifies, it is not bound to issue a licence. 

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