Vikram Pandit, the former Citigroup chief executive who was ousted last year, has returned to banking by investing in an Indian financial services group that hopes to launch a new lender.
Mr. Pandit, who left Citigroup in October, and Hari Aiyar, another Indian executive, are acquiring a 3 percent equity stake in JM Financial and launching a $100 million fund to invest in distressed assets, the Indian company announced on Thursday.
A person familiar with the situation said the move was only one part of Mr. Pandit's plan to build a portfolio of investments in the U.S. and India.
"We share similar values and are confident that the proposed association will create strong domestic financial services businesses with global best practices and reach," said Nimesh Kampani, chairman of JM Financial. "We are very excited to have Vikram as a strategic investor."
It is the first public sign of Mr. Pandit's intentions since he was asked to resign as chief executive of Citi by its chairman, Mike O'Neill, in October. The pair clashed over strategy and Mr. Pandit was replaced by Mike Corbat.
"I continue to believe in the long term growth prospects of India," said Mr. Pandit. "I have known Nimesh and JM Financial for over two decades and believe that, given the opportunity, JM Financial can provide the banking and financial services that the country needs."