MUMBAI: Vikram Pandit, the new Citigroup CEO, will have to add his home country India to the long list of problems he must resolve. The $630-million sale of Citi’s BPO operations in India to Genpact, concluded in-principle in September, has got deadlocked due to Citi’s financial worries related to the US subprime mortgage crisis and reservations expressed by a Genpact customer, which is also a major rival to Citi, industry sources said. Officials at Genpact and Citigroup declined to comment, but sources said the US financial group Wachovia was ‘upset’ over Genpact’s decision to buy the 10,000-strong BPO unit from Citi. Wachovia uses services of a dedicated unit in India, run jointly with Genpact under a seven-year agreement. “It is possible that Genpact still doesn’t want to announce the deal until everything is settled,” a source close to Genpact said. However, other sources told ET that Citi’s multi-billion dollar writedowns arising from the subprime mortgage crisis have cast doubts on its ability to provide the minimum level of business promised to the potential buyer. A key part of the negotiations had been the amount of business that Citi was willing to commit, a key factor affecting the sale price. According to newswire reports earlier this month, securities firms and banks have announced about $66 billion of losses and writedowns for assets linked to the collapse of the US subprime mortgage market. Genpact’s silence on the subject had also fuelled speculation among some investment bankers that deal had not yet been done. “No deal is done until the cash changes hands,” said one investment banker, who was not involved in this deal. However, a source familiar with the transaction told ET that Genpact and Citi were actually holding informal discussions on how to take the integrated operation forward. This could mean the deal is not yet derailed. The Citi-Genpact deal will be a benchmark in many ways, being the first major sell-off of a captive operation to a third party. It is being closely watched for pointers on how processes that are strategic to a bank and also very sensitive in nature will be handled by a third party.