In January 1990, soon after having become a partner at Morgan Stanley, Vikram Pandit, then 33 years old, was having brunch with another freshly minted partner at Sarabeth’s on the Upper East Side of Manhattan.

“Vikram was already talking about how we might develop second-line managers who would one day be our core team —when he’d take over Morgan Stanley," Pandit’s companion at the brunch recalled recently. “Make no mistake about it. Beneath that amiable nature—which is genuine, by the way—there’s a steely personality. Mathematically, quantitatively, and strategically, he’s very smart. He’s also very astute at corporate politics, although he rarely shows his hand. Vikram has always been singularly focused on reaching the top.”

Today, Pandit finally reached the top—although not at Morgan Stanley.

Nearly eight months after joining Citigroup, Pandit has been named chief executive of the giant bank, replacing Charles Prince, who resigned five weeks ago.

Pandit will need to call on all his skills to fix Citigroup, which has been staggering since taking huge hits on its holdings of investments tied to U.S. subprime mortgages. The company took a $6.5 billion write-down in the third quarter and is expected to write down an additional $11 billion in the fourth quarter.

The losses have prompted the financial behemoth to shore up its capital. Late last month, Citigroup received a $7.5 billion cash infusion from the Abu Dhabi Investment Authority, the world’s largest sovereign wealth fund, in return for securities that can be converted into a 4.9 pecent stake in the company.

When it comes to assessing risk and the investment-banking side of the business, there is little question that Pandit is up to the task. Widely respected on Wall Street, he was president and chief operating officer of Morgan Stanley’s institutional securities and investment-banking business before leaving in a power struggle with Phillip Purcell, then the chief executive of Morgan Stanley.

But Citigroup is not just a big Wall Street firm. The product of two decades of mergers, culminating in the $83 billion merger of Citicorp and Travelers in 1998, it is a sprawling commercial and retail bank with a presence in more than 100 countries.

Citigroup has suffered from a lack of investment and a minimum of integration that at times has had bankers in different divisions working at cross purposes.

Whether Pandit, who has never run a public company before, is up to the challenge of such a complex and troubled giant is the question.

Pandit joined Citigroup to head alternative investments after the firm bought out his hedge fund, Old Lane Partners, for $800 million. In October, he was promoted by Prince to oversee trading and investment banking as well.

Pandit brought with him loyal Morgan Stanley lieutenants, such as John P. Havens, who ran the institutional equity business. Those who know both men well say they work in tandem on issues like hiring and firing.
 
“Vikram would never look at a person and tell him that he’s been fired,” an investment banker said. “I think that’s because he’s genuinely decent and doesn’t like confrontation. So all the firings are done by Havens. In that sense, Vikram is very Indian in his sensibility, even though he hasn’t lived in India since his teens.”
 
Pandit came to the United States at the age of 16 when his father was posted to New York. Coming from Bombay, now Mumbai, Vikram and his sister were brought up in a traditional Indian household, where Hindu prayers were recited faithfully and the children were exhorted to be both ambitious and always display humility. The parents would perform poojas (Hindu rituals) at home and celebrate such traditional Hindu milestones as Diwali, the Festival of Lights.

“This is a great day for Indian professionals,” Bidyut Sen, managing partner of Sengor Capital in New York, said this afternoon. "In Vikram, you have the rare blend of Indian tradition and global forward thinking. His strategic vision is what Citigroup needs today to fulfill  the promise of its great franchise."

Pandit graduated with a bachelor’s degree in electrical engineering from Columbia in 1976, and later earned a doctorate in finance from Columbia.

Notwithstanding his India connections, Pandit is not known for any expertise in emerging markets, even as the Indian economy has grown at an annual pace of 7 to 9 percent in recent years.
 
“Surprisingly, Vikram has far fewer personal relationships within the higher echelons of Indian business,” a friend said today. “But his political instincts are like those of Chanakya, the legendary Indian political savant. I bet that if Vikram were ever to return to India, he’d do very well in politics. Except, of course, that he’s shy in front of crowds.”
 
Still, Pandit is the beneficiary of a strong bond between the Indian subcontinent and Citigroup that dates back more than four decades, when what was known as Citibank accelerated the hiring of bright finance and management executives from India and Pakistan. Many of these hires were graduates of such prestigious Indian schools as the Indian Institutes of Technology and the Indian Institute of Management.

Ajay Banga, who joined the bank in 1996 after serving as PepsiCo’s marketing director in India, is chairman and chief executive of Citi’s international consumer group. Similarly, Vikram Atal is chairman and C.E.O. of Citigroup consumer cards.

Indeed, some of these executives rose so rapidly through the ranks that they were often touted as possible C.E.O. candidates. For example, Victor Menezes, an I.I.T. alumnus who was hired by Citibank’s then chairman Walter Wriston, soon became a protégé of Wriston’s successor, John S. Reed. It was Reed who designated Menezes as the bank’s in-house, one-man think tank and elevated him to vice chairman of the entire institution and C.E.O. of banking operations. At the time, the widespread speculation within Citicorp was that Reed was grooming Menezes to succeed him.

Menezes’ fortunes steadily declined after Citicorp merged with Sandy Weill’s Travelers Group.

Another high-profile departure from Citigroup was Shaukat Aziz of Pakistan, who was head of Citicorp’s global private bank. In 2004, Pakistani president Pervez Musharraf made Aziz prime minister, a post he held until last month.

In contrast to Aziz, who has lavish homes in New York and elsewhere, Pandit has had a fairly modest lifestyle.

In September, however, he and his wife—who have two teenagers—bought actor Tony Randall’s full-floor 10-room apartment at the Beresford on Central Park West.