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Britain’s largest state-owned bank, Royal Bank of Scotland (RBS), has decided to shut down its banking operations in the country but will be retaining the back office.
“We are looking at running down the India business but we will be retaining the back office. We will have to sit down and take a final call on it. But we will begin talks with Reserve Bank of India (RBI) to see what is the process as they are strict with licences,” said the management in a conference call. The bank is yet to take a final call on whether they will be selling or winding up its India operations.
The balance sheet exposure of its India business has also almost halved in calendar year 2014. At the end of December 2014, the net balance sheet exposure of the bank's operations in India fell by £1.7 billion to £2.0 billion. This came on the back of reductions in corporate lending, particularly in the oil and gas and mining & metals sectors, and in lending to banks, largely trade finance.
“The reductions in part reflected increasing capital requirements and sales of low yielding assets,” said RBS.
The Indian banking operations mainly include investment and wholesale banking. The bank also has a wealth management business and retail presence as well. According to reports, the Indian banking business employs about 1,200-1,500 people. However, the lender does not give an official breakup of the employee base across countries.
According to people familiar with the development, the back office in India employs about 12,000 people and is a key global hub and is used to support finance and other operations in other markets.
Earlier this year, the lender moved 60 back-office roles from the UK to India.
This restructuring comes amidst RBS posting a loss of £3.5 billion on the back of a hit by a £4-billion write-down on US Business Citizens and a tax charge of £1.9 billion. As a part of the group strategy, the lender has decided to consolidate its operations in several markets.
“CIB (corporate and institutional banking) will reduce its geographical footprint to approximately 13 countries, compared with 38 at the end of 2014, though RBS will also retain its back office operations in Poland and India,” it said in a release.
The management also added in the conference call, “We don’t want to be a global bank, we want to be a very good bank in the UK…we are not going to be all things to all people.”
RBS has been in the process of shrinking its business in India. In May 2013, the lender had announced it had started the process of consolidating its retail and commercial banking business in India. As a result, RBS had shut 23 of its 31 branches in the country.
As per people familiar with the development India is a key global hub and the back offices are used to support finance and other operations in other markets and employs about 12,000 people.
Earlier this year the lender moved 60 back-offices roles from the United Kingdom to India.
“CIB will reduce its geographical footprint to approximately 13 countries, compared with 38 at the end of 2014, though RBS will also retain its back office operations in Poland and India,” it said in a release.
“We are looking at running down the India business but we will be retaining the back office. We will have to sit down and take a final call on it. But we will begin talks with Reserve Bank of India (RBI) to see what is the process as they are strict with licences,” said the management in a conference call. The bank is yet to take a final call on whether they will be selling or winding up its India operations.
The balance sheet exposure of its India business has also almost halved in calendar year 2014. At the end of December 2014, the net balance sheet exposure of the bank's operations in India fell by £1.7 billion to £2.0 billion. This came on the back of reductions in corporate lending, particularly in the oil and gas and mining & metals sectors, and in lending to banks, largely trade finance.
“The reductions in part reflected increasing capital requirements and sales of low yielding assets,” said RBS.
The Indian banking operations mainly include investment and wholesale banking. The bank also has a wealth management business and retail presence as well. According to reports, the Indian banking business employs about 1,200-1,500 people. However, the lender does not give an official breakup of the employee base across countries.
According to people familiar with the development, the back office in India employs about 12,000 people and is a key global hub and is used to support finance and other operations in other markets.
Earlier this year, the lender moved 60 back-office roles from the UK to India.
This restructuring comes amidst RBS posting a loss of £3.5 billion on the back of a hit by a £4-billion write-down on US Business Citizens and a tax charge of £1.9 billion. As a part of the group strategy, the lender has decided to consolidate its operations in several markets.
“CIB (corporate and institutional banking) will reduce its geographical footprint to approximately 13 countries, compared with 38 at the end of 2014, though RBS will also retain its back office operations in Poland and India,” it said in a release.
The management also added in the conference call, “We don’t want to be a global bank, we want to be a very good bank in the UK…we are not going to be all things to all people.”
RBS has been in the process of shrinking its business in India. In May 2013, the lender had announced it had started the process of consolidating its retail and commercial banking business in India. As a result, RBS had shut 23 of its 31 branches in the country.
As per people familiar with the development India is a key global hub and the back offices are used to support finance and other operations in other markets and employs about 12,000 people.
Earlier this year the lender moved 60 back-offices roles from the United Kingdom to India.
“CIB will reduce its geographical footprint to approximately 13 countries, compared with 38 at the end of 2014, though RBS will also retain its back office operations in Poland and India,” it said in a release.
