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Will Citigroup's exit from retail banking operations in India impact its customers?

Citigroup plans to focus on its non-US consumer banking operations in UAE, Singapore, London and Hong Kong as these places have a great concentration of wealth.

twitter-logoBusinessToday.In | April 16, 2021 | Updated 23:34 IST
Will Citigroup's exit from retail banking operations in India impact its customers?
Citigroup's investment banking operations will continue in these markets.

The Citigroup on Thursday said it will exit retail banking operations in 13 countries across Asia, including India, and parts of Europe to concentrate more on wealth management outside the US.

Making the announcement, CEO Jane Fraser, who took over the company's reins in February this year, said Citigroup plans to focus on its non-US consumer banking operations in UAE, Singapore, London and Hong Kong as these places have a great concentration of wealth.

She said Citigroup lacks the scale to compete in the 13 markets it is leaving. However, the investment banking operations will continue in these markets.

Also read: Why is Citigroup exiting consumer business in India?

Besides India, the third-largest bank in US will exit consumer operations in China, Australia, Malaysia, Bahrain, Korea, Indonesia, Russia, Vietnam, the Philippines, Thailand, Poland, and Taiwan.

Will this move affect customers in India?

The decision marks the exit of the oldest foreign banking entity, Citi Bank, from India. Citi Bank has a balance sheet size of Rs 2.18 lakh crore in India. As of March 2020, it had 3 million retail customers, over 1 million bank accounts and over 2 million credit cards in the country. The deposit base of the bank was around Rs 1.57 lakh crore for 2019-20.

The Citigroup will need to find a buyer for exiting its retail banking operations in India and the Reserve Bank of India will have to approve the buyer. All depositors, loans, credit cards of Citi Bank will be transfered to the buyer seamlessly, making them the customers of the acquiring bank. However, this move is unlikely to have any material impact on the bank's customers or Citigroup's clients. Ashu Khullar, the CEO of Citi India, also confirmed the same.

"There is no immediate change to our operations and no immediate impact to our colleagues as a result of this announcement. In the interim, we will continue to serve our clients with the same care, empathy and dedication that we do today," Khullar said.

Also read: Govt completes assignment of 4G spectrum to telecom companies

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