After two years of negotiations, the Reserve Bank of India is set to allow HSBC to acquire 23 of the 31 branches in India of Royal Bank of Scotland.
The HSBC-RBS deal, announced in July 2010, was part of RBS’ strategy to retreat from some businesses outside its home market.Though RBI had cleared HSBC’s acquisition, it had not allowed the RBS branches to be a part of the deal. RBI had asked RBS to surrender the branch licences while selling its business. As a result, the deal, supposed to be completed by September 2011, got delayed.
HSBC had insisted the transaction would not be viable if it did not get a majority of the branches. RBI has now agreed that HSBC can take over the 23 branches but in a staggered manner — that is, seven to eight each year.
The RBI decision will eventually take HSBC’s branch count in India to 73, helping it consolidate as the second largest foreign bank in the country, in terms of network.
No comments:
Post a Comment