NEW YORK (

TheStreet

) -- Former

Citigroup

(C) - Get Report

CEO Vikram Pandit is returning to his roots in more ways than one.

Pandit, who has been keeping a low profile since his

unceremonious exit from Citi

late last year, is buying a 3% stake in Indian financial services company

JM Financial

along with his partner Hari Aiyar.

The firm intends to apply for a banking license and said it

will appoint Pandit as non-executive chairman

of the proposed bank.

A firm led by Pandit will also invest $100 million in the expansion of JM Financial's lending and financing activities, which may include the setting up of a $100 million distressed asset fund.

Pandit was born in India but moved to the U.S. when he was 16. He became CEO of Citigroup in 2007 after he sold his hedge fund Old Lane to Citi for $800 million.

Pandit's tenure as CEO at the bank was a rock one and he frequently was at the receiving end of criticism as the bank battled for life in the wake of the mortgage crisis.

Although the bank made headway in its strategy to shed non-core assets and expand in profitable emerging markets, Pandit abruptly resigned in October last year. Reports suggested that he clashed with the board on future strategy at the bank.

Michael Corbat took his place and has since then embarked on a massive restructuring strategy that has been greeted enthusiastically by shareholders.

-- Written by Shanthi Bharatwaj in New York.

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