Citigroup’s Jhaveri falls afoul of the RBI

MUMBAI: Citigroup Inc. has joined a growing list of lenders that have seen their local leadership roiled by the nation’s central bank.

The Reserve Bank of India (RBI) around the end of last year informed Citigroup that it wouldn’t approve a new term for Pramit Jhaveri, who had been India chief executive officer for almost a decade, people with knowledge of the matter said. That prompted the bank, which had planned to nominate Jhaveri for another three-year term, to change course and move him to another position, the people said, asking not to be named.

The RBI’S decision stemmed from personal investments by Jhaveri, said one of the people, without providing specifics. A representative for the RBI didn’t respond to an email and phone calls seeking comment.

Indian regulators have tightened supervision of the banking industry in the past year following a string of high-profile scandals, with the RBI denying term extensions for two CEOS of local banks since April.

Citigroup hasn’t applied for another term for Jhaveri and the bank won’t comment on regulatory matters, a spokesman for the lender said in an emailed statement. Jhaveri will take over as vice chairman for banking, capital markets and advisory in the Asia-pacific region after a new India CEO is named, and will remain based in Mumbai. On January 11, the RBI announced that it had fined Citigroup’s India unit $422,000 for not fully following “fit and proper” criteria for the bank’s directors.

The statement didn’t make any reference to Jhaveri, but the fine was related to his personal investments, one of the people said.