UK-based Royal Bank of Scotland (RBS) on Thursday said the Reserve Bank of India (RBI) has agreed with the bank?s existing proposal to sell its retail and commercial banking business in India worth $1.8 billion to British banking major HSBC.
It did not, however, give other details like whether RBI has allowed the transfer of some branches to HSBC which is a part of the deal that was announced in July 2010, a release by the RBS said.
?We can confirm that the RBI is agreeable to the transfer of our retail and commercial businesses in India to HSBC. We continue to work closely with HSBC and the regulators to complete the transfer in a manner that is in the best interests of our clients and employees.?
India remains one of the top three priority markets in the Asia Pacific region for the RBS Group, where it is a market leader in several businesses, added the release. RBS is committed to India remains focused and we have been and will continue to invest strategically in India, across our ?go-forward? businesses, it said .
RBS, which received a ?45.5 billion bailout from UK government post the 2008 financial crisis, had announced its decision in July 2010 to sell its retail and SME business in India for premium of $95 million, which would be over adjusted net asset value of the bank?s businesses in the country.
The banks had aimed to complete the transaction in the first half of this year. and has been selling assets and cutting jobs. HSBC, in turn aims to generate $1 billion in annual profit from India by 2013.
Post sale of its retail and SME businesses, RBS intends to continue as leading global wholesale and investment bank, transaction services and private bank in Asia Pacific with significant presence in 11 markets, including core markets such as India and China.
?We have been making great progress in our ambition to be among the top three foreign banks in the businesses and products that we operate in,?? said the release.
RBS, which had in 2007 taken over ABN Amro Bank, has 31 branches, 11 lakh customers and 1,800 employees in India. HSBC serves 15 lakh customers through a network of 50 branches and 7,000 employees. After deciding to sell its retail and SME businesses RBS has substantially scaled down its operations in these areas. If the deal goes through, including the transfer of branches, HSBC would move closer to Standard Chartered Bank in terms of branch network.