Royal Bank of Scotland (RBS) mortgage portfolio includes housing loans, while banking business includes providing small and medium sized enterprises with high end products and services.
In its order dated September 10, Competition Commission of India (CCI) said the proposal "is not likely to have an appreciable adverse effect on competition in India and, therefore, the Commission hereby approves the proposed combination under...the (Competition) Act".
The regulator said it has observed that after the proposed deal between the banks comes into effect, RBS would exit the credit card business, mortgage portfolio and business banking segment.
"Currently, Ratnakar Bank has no presence in the credit card business. It is observed that the presence of Ratnakar Bank in the mortgage and banking business in India would be insignificant after the proposed combination," CCI said.
Following the execution of the "Master Sale and Purchase Agreement" entered into between Ratnakar Bank and RBS last month, the entities approached CCI for its approval.
Mid-sized private sector lender Ratnakar Bank had announced it had acquired British banking major RBS' business banking segment, credit cards and mortgage portfolio for an undisclosed amount.
The Kolhapur, Maharashtra-headquartered bank has a customer base of 5 lakh with a total business size of Rs 14,500 crore.