RBS scraps planned sale of Indian banking business

The still 73 per cent state-owned, bailed-out bank said it had “concluded that it is not feasible to sell the business in its entirety”.

The RBS statement said: “We will now look at other options which may include a wind-down or sale of individual parts of the business and we will communicate to clients accordingly.”

Quoting a “a person with knowledge of the matter” the Bloomberg news outlet reported that most of the bank’s roughly 600 employees in the sub-continent would lose their jobs by the end of the year as the local operations are wound down.

In 2014 RBS’s balance sheet exposure in India nearly halved to £2bn.

Since taking over more than two years ago, chief Executive Ross McEwan has overseen a strategy that has resulted in the lender selling or exiting businesses around the globe, including RBS’s offshore Indian loan portfolio and its private banking business in the country.

The U.K. lender had a local balance sheet of 190 billion rupees ($2.8 billion) and a loan book of 112 billion rupees in India at the end of March 2015, according to financial statements posted on its website.

RBS suspended an auction for the Indian business after receiving final offers in December, people with knowledge of the matter said. Bidders couldn’t agree with RBS on some conditions, including requirements to take on employee pension liabilities and fulfill certain guarantees the bank offered to clients, one of the people said.

The bank has informed the local regulators of its approach, according to Wednesday’s statement. Employees in India “will be treated fairly,” in line with the lender’s global policies and local practices, and will be given clarity on their positions “over the coming weeks,” RBS said.

DBS Group Holdings Ltd., Southeast Asia’s largest bank, and IDFC Bank Ltd. were among suitors preparing final bids for RBS’s Indian banking business under the previous sale plan, people familiar with the matter said in December.