Citigroup plans to exit retail banking in 13 markets, including India

American banking major Citibank on Thursday said that it will exit from the high visibility consumer banking business in 13 countries, including India. With this announcement, a big question arises about its possible impact on the bank’s existing customers and employees in India. 

Given this development, let's understand the issue :

Why is Citibank exiting its business in India?

• The American banking major announced that it was exiting from the consumer banking businesses in 13 countries, with its global CEO Jane Fraser attributing the decision to an absence of scale to compete in these geographies.

• However, the contours of the exit are not known, and the proposed exit from the consumer banking business will also need regulatory nods.

Will Citibank's business completely shut in India?

• A Citibank official said that the bank is only exiting the consumer business in India and not closing it down. He said that the lender will continue to focus on the wholesale business in India and will continue to scale it up.

In which segments Citibank operates in India?

• According to a PTI report, Citibank's business comprises credit cards, retail banking, home loans, and wealth management. The bank has 35 branches in the country and employs approximately 4,000 people in the consumer banking business.

Will the existing account holders in India be impacted?

• Citibank India said that they have started looking for a buyer to take over its consumer business. Till this happens, the bank said, there will be no impact on the existing customers or its employees because of this announcement.

• One of the bank's spokesperson clarified,

There is absolutely no impact on the customers. If a customer walks into our branch tomorrow to get a card or open an account, we will still do it. Citi is the largest foreign bank in the country, it is also one of the most profitable...Nothing is changing. The business will continue as usual till it finds a new home in a new buyer.

 

• According to Adhil Shetty, CEO, BankBazaar.com, the bank is not winding up its business but will initiate an exit process after approvals from RBI through the sale of the business. It will be a very structured process, and until the sale takes place with due approvals from regulatory bodies, the bank will continue to do business and service customers.

• Post sale, Shetty says, customers will have the opportunity to choose whether to continue with the new bank or close their existing accounts. he further says,

Depending on the products they have, there may be differences in the terms and conditions. The products may also undergo rebranding after the sale. So customers must be prepared to check the revised terms and conditions for their existing loans, credit cards, and deposit accounts as well as update their cards or chequebooks over time once the sale concludes. However, for now, customers can expect it to be business as usual.

Will there be any impact on its credit card business in India?

• The bank said that the credit card business will function normally, with zero impact on customers. However, once the sale is made, the customer can choose whether to continue with the new owner or close the account.

Disclaimer: To spread awareness among the stakeholders, this article has been mimicked from  cnbctv18.com, and minor changes have been made thereupon. ChargePlate does not intend to plagiarize any third-party's exertion.