The penalty on Axis Bank has been imposed in exercise of powers vested in RBI under provisions of section 47A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949 (the Act)
The transaction includes the sale of the consumer banking businesses of Citibank India, which includes credit cards, wealth management, retail customer accounts and consumer loans, Citigroup said.
“The transaction also includes the sale of the consumer business of Citi’s non-banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio,” it added.
The deal will include the transfer of about 3,600 Citi employees to Axis Bank, and Citi expects the release of around $800 million of allocated tangible common equity after the deal.
However, the sale excludes Citigroup’s institutional client businesses in India, it said adding that “Citi remains committed and focused on serving institutional clients in India and globally”.
The transaction is expected to close in the first half of calendar year 2023 and there will be no immediate impact on the services to the customers of Citi’s consumer businesses in India, the US bank said.
The deal is part of Citi CEO Jane Fraser’s plan to revamp the lender by exiting retail banking operations in 13 nations and focusing on its more lucrative institutional and wealth management businesses.
In April 2021, American banking major Citigroup announced its plan to exit from the consumer banking business in India as part of its global strategy. The business comprises credit cards, retail banking, home loans and wealth management.
The bank has 35 branches in the country and employs about 4,000 people in the consumer banking business.
Citigroup had entered India in 1902 and started the consumer banking business in 1985.
Apart from the institutional banking business, Citigroup in India will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai and Gurugram.