Ratnakar Bank has bought parts of the Indian retail business of Royal Bank of Scotland (RBS), subject to regulatory approvals, the Indian bank said on Friday. Following the deal, Ratnakar Bank will own the Scottish bank?s business banking, credit card and mortgage business in India, it said in a statement.
The transaction is expected to help Ratanakar Bank enhance its base of current account savings account deposits. Employees of RBS associated with these businesses are proposed to be absorbed by Ratnakar Bank. “The deal comprises over 1.2 lakh customers. RBS is fully committed to support impacted customers through this transition and will be writing to inform on the next steps for them,” RBS said.
After the deal, RBS will maintain retail banking presence in 10 locations, namely, Bangalore, Chennai, Delhi, Gurgaon, Hyderabad, Kolkata, Mumbai, Noida, Pune and Vadodara, the bank said. The sale will not affect RBS’ corporate and institutional business or its private banking businesses in India, the Scottish lender said.
PricewaterhouseCoopers was the advisor to Ratnakar Bank while Morgan Stanley and RBS M&IB Asia Pacific were the advisors to RBS for the deal. Luthra & Luthra Law Offices acted as lead legal counsel to Ratnakar Bank, which also received English law advice from Slaughter and May. AZB & Partners acted as Indian legal counsel and Linklaters LLP as English legal counsel for RBS.
Ratnakar Bank currently has a base of 5 lakh customers and total business worth R14,500 crore.
The sale is part of the Scottish lender’s decision to wind up some of its businesses outside its home country. RBS had first announced in July 2010 that it will be selling its India retail business to HSBC. However, the deal had to be called off after it failed to get the requisite approvals.
The Scottish lender has 31 branches in India, which it acquired from ABN Amro in 2007. The value of the retail and commercial banking assets of RBS in India was estimated at around $1.8 billion at the end of March 2010.
Earlier this year, it was rumoured that Axis Bank, Yes Bank and IndusInd Bank were in the race to buy RBS’s retail business in India.