Australia’s largest lender, Commonwealth Bank, has decided to wind up its operations in India. “After careful evaluation of our India business alongside our refocused strategy, the decision has been made to wind-down and close the CBA Mumbai branch,” said a note on the bank’s website.
It also added that in the interim the bank customers will be able to conduct withdrawals and fund transfers but the lender will not be able to accept new term deposits or open new accounts.
Commonwealth Bank of Australia had commenced operations in the country in 2010 and was providing trade finance, remittance and foreign exchange to organisations that trade between Australia and India. Prior to this, in 2005 the bank had set up a representative office in India in 2005.
The bank had made a net loss of Rs 2.44 crore in FY15. The loss brought forward in its balance sheet stood at Rs 34.69 crore.
This comes at a time when India as a market seems to be losing its charm for the foreign banks. Last year, HSBC decided to shut downs its private banking business while RBS also sold off its private banking business. Apart from this Citibank had decided to shut down its retail broking business and another foreign lender UBS had approached the banking regulator with a proposal to downgrade its branch to a representative office in Mumbai. Another foreign lender, Standard Chartered had also announced last year that it will be reducing focus on some of its businesses.
However, on the other hand Reserve Bank of India had envisaged a bigger play for the foreign lenders in the country and had allowed these banks to take up the wholly owned subsidiary (WoS) route in India. In turn, these banks would have gained treatment almost at par with the local lenders. Even though some banks such as DBS, ABN Amro and State Bank of Mauritius had applied to RBI to set up a WoS in the country but RBI is yet to grant its approval to the lenders.
