The financial giant will also pay its former President and Chief Operating Officer John Havens $6.79 million, it said in a regulatory filing with the US Securities and Exchange Commission.
Chairman of Citi's board of directors Michael O'Neill said Pandit and Havens have made "significant contributions to Citi during their five years of service.
"Vikram steered Citi through the financial crisis, realigned its strategy, bolstered its risk management processes and returned it to profitability. John's focus on our institutional businesses increased our capabilities and helped steer our clients through volatile times.
"Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable," O'Neill said.
While Citi will also honour all past awards that they are legally entitled to, there are no severance payments, he said, adding "awards to which they are not legally entitled have been forfeited".
The board has granted Pandit $6.65 million as incentive awards for his "significant" contributions to Citigroup during 2012, the filing said.
Pandit and Havens would not be entitled to any severance payments or special benefits or perquisites as a result of their departures from Citigroup under any employment or separation pay agreement or plan, the company said.
In a surprise move last month, Pandit had quit from the post even after steering the crisis-hit banking giant into profitability.
Media reports at the time had said that Pandit's exit came in the wake of differences with the board.