Pandit's Back in Banking — in India

Seven months after his abrupt departure from Citigroup (NYSE:C), former Chief Executive Vikram Pandit is wading back into the financial industry.

Pandit and business partner Hari Aiyar are taking a 3% stake in JM Financial Group in India. The Mumbai company said Thursday that it is applying for a banking license from Indian regulators, and that it would nominate Pandit as non-executive chairman of the bank. The former Citigroup leader will also run a distressed asset fund set up by his firm and JM Financial, with an initial target capitalization of $100 million.

It is the first significant industry reappearance of Pandit since October, when Citigroup's board abruptly replaced him with current CEO Michael Corbat. Pandit took over Citigroup in late 2007, as the bank's backlog of bad mortgages tipped it into the financial crisis, and shepherded the bank through three government bailouts and a slow recovery from the worst of the crisis.

But he faced a series of setbacks last year, including Citi's failed stress test and a shareholder rejection of his compensation package, before the board forced him out.

Pandit, who was born in India, said in a statement Thursday that he believes "in the long-term growth prospects of India" and that "given the opportunity, JM Financial can provide the banking and financial services that the country needs."