UBS closes India banking ops; other services to continue

Swiss banking giant UBS has decided to exit the India banking sector. CNBC-TV18's Gopika Gopakumar reports that the foreign bank will wind up its lending and wealth management business but will continue to operate its investment banking business.

After Morgan Stanley, UBS is the next foreign bank to close its banking operations in India. The MNC is looking to reposition its India business and wind up its banking operations which include foreign exchange, lending and wealth management services.
However, the bank will continue to retain and operate its securities and investment banking business. This is part of the group's strategy to concentrate on its core strength which is the securities and investment banking business.
The process of winding down will be spread over a period of two years and 50 employees are expected to leave. According to an UBS spokesperson, "We are not exiting India and we will continue to serve our corporate and institutional clients."
UBS is likely to submit or surrender its banking licence in the next few days and likely to submit audited accounts up to June 2013 to the Reserve Bank of India (RBI).
The other reason why UBS could be making an exiting is the increasingly tough regulatory scenario which made it difficult for UBS to operate in India. UBS’s stint was  controversial as it received its licence in 2008 after a series of probes. In fact, the RBI had upheld its approval for granting the licence because in enforcement wing at that point in time was investigating into alleged money transfer by a Saudi Arabia arms dealer through UBS.