Under a late-June agreement with the U.S. Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, Citigroup said it would consider whether to replace Kelly before October, according to the paper.
Kelly tendered his resignation in July on hearing of the agreement, the paper said, citing people near to the situation. Kelly was made vice chairman focused on strategy and merger activity at Citi.
A Citigroup spokesman in Hong Kong could not be immediately reached for comment by Reuters.
Huge losses at Citigroup have resulted in the U.S. government giving the bank $45 billion of taxpayer funds and taking a 34 percent equity stake.
Citi, last month, announced its biggest management shake-up since the financial crisis began, replacing Kelly with John Gerspach and installing a new banking chief.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Muralikumar Anantharaman)