As part of the government's bailout of the financial system, Citigroup received $45 billion in funds from the $700 billion Troubled Asset Relief Program (TARP), as well as a government guarantee of around $300 billion in assets.
"I want to thank our government for providing Citi with TARP funds," Pandit said.
In December, Citigroup repaid $20 billion in taxpayer assistance and terminated the asset-guarantee program. However, the government still owns a 27 percent stake in the company, a stake it wants to sell over the next year.
Pandit, in his prepared remarks, said Citigroup intends to help taxpayers "realize value on that investment," since the firm is now "operating on a very strong foundation."
He acknowledged that the company made mistakes in the buildup to the financial crisis.
"In general we allowed ourselves too much leverage – too many people borrowed too much," he said.
In her opening statement, the panel's chair, Elizabeth Warren, said Citigroup can still operate under an implicit guarantee of government support because it is regarded as "too big to fail."
"The sheer magnitude of Citigroup's operations, and the company's history of receiving extraordinary government support, has led this panel to an inescapable conclusion: Citigroup, along with a handful of other financial institutions, enjoys an implicit government guarantee," she said. "The United States government will bear any burden and pay any price to ensure that Citigroup does not fail."
Treasury bailout chief Herb Allison disagreed.
"There is no too-big-to-fail guarantee on the part of the U.S. government," Allison said.
While Allison would not comment specifically on the current health of Citigroup, he did tell the panel, "We have no plans whatsoever to make further investments in Citigroup."
The $700 billion bailout in late 2008, he said, was "necessary at that time to prevent catastrophic failure."
With the Senate Banking Committee poised to unveil a proposal for reforms to the financial system next week, Pandit said Congress should form a new federal authority to protect consumers.
The Obama administration's proposal to create a standalone consumer protection agency has been met with vigorous opposition from the financial industry.
"We support the need for a strong consumer authority that is part of the regulatory system to promote greater transparency, sound practices, growth, and stability in the consumer credit market," Pandit said. "Banks and non-banks need to be more responsible. These are reforms that could be costly for the industry but Citi believes they are necessary."
In a non-partisan report released earlier this week, Warren emphasized that new consumer protections are needed to avoid "disastrous" consequences.