Citi Bank on Wednesday joined the list of foreign banks that have exited the retail banking business in India as the US-based banking giant announced selling its consumer banking portfolio to Axis Bank for an estimated Rs 12,325 crore. Global banking majors such as ANZ Grindlays, RBS, Commonwealth Bank of Australia have scaled down their operations in India.
In a mega-deal announcement on Wednesday, Axis Bank and Citibank said their boards have approved acquisition of Citibank's consumer businesses in India by Axis Bank. Under the deal, the US-based Citi will sell consumer banking businesses of Citibank India, which includes credit cards, retail banking, wealth management and consumer loans.
Citi's scaling down of operations in India is part of its strategy to exit retail businesses in 13 markets to conserve capital and focus on higher-yielding revenue streams. It had entered India in 1902 and started the consumer banking business in 1985.
Earlier in 2012, British banking major Barclays massively scaled down India operations by closing a third of its branches located in the non-metro areas. Shrinking its operations in India was part of the UK-based bank's strategy to move away from retail banking to concentrate more on the corporate banking, investment banking and wealth management verticals.
In 2016, Commonwealth Bank of Australia exited India operations saying the decision was taken after a careful evaluation of its India operations alongside its refocussed strategy. The same year, Royal Bank of Scotland Plc (RBS) too decided to wind up its corporate, retail, and institutional banking business in the Indian market as it wanted to reduce its global footprint.
Australia and New Zealand Bank had in 2000 wound up domestic operations here after selling its Grindlays Bank unit to Standard Chartered for USD 1.34 billion. However, it re-entered the Indian market in 2011 by opening a new branch in Mumbai. ANZ was in India since 1984 through its presence as Grindlays Bank.
In 2011, Deutsche Bank sold its credit card business to IndusInd Bank. In 2013, UBS exited India operations while Morgan Stanley surrendered banking license while continuing investment banking business.Likewise, Merril Lynch, Barclays and Standard Chartered scaled down their operations in 2015. Among others, HSBC shut down two dozen branches and reduced its presence in 14 cities in 2016 and BNP Paribas shut down its wealth management business in India in 2020.