Citibank To Exit From Consumer Business In India, Know The Impact On Existing Customers, Employees

The other 11 markets in affected by the decision are: Australia, Bahrain, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

Image: AFP

In a major development in the banking sector, American banking major Citibank Thursday announced exiting the consumer banking business in India as part of a global strategy. The company has been offering services in several areas including credit cards, retail banking, home loans, and wealth management.

What’s the move?

The bank will be exiting the consumer banking businesses in 13 countries. According to global CEO Jane Fraser, the decision to close the business is influenced by the absence of scale to compete in these geographies.

Citigroup will be focusing its global consumer banking business on four markets namely Singapore, Hong Kong, London, and the United Arab Emirates. However, the company will exit China, India, and 11 other retail markets, as per news agency AFP.

The company will be shifting its focus to wealth management drifting away from retail banking in regions where it is small.

Fraser, who took up as the CEO in March, described the move as part of its effort to "double down" on wealth management, where the growth opportunities are better.

Which markets are going to be impacted?

The company will exit mostly from Asia regions, where Citigroup's global consumer banking business at the end of 2020 had $6.5 billion in revenues, 224 retail branches and $123.9 billion in deposits, as per news agency AP.

The other 11 markets in affected by the decision are: Australia, Bahrain, Indonesia, South Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

How will impact consumers?

Even as the exact contours of the exit were not clear yet, but the proposed exit from the consumer banking business will have to undergo regulatory approvals.

The proposed exit will not have any immediate impact on its operations in India. "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," informed Citi India''s Chief Executive Ashu Khullar, as per the PTI report.

Khullar informed that the new strategy is aimed at strengthening the bank’s position to offer the full global power of Citi to institutional clients reinforcing its leading positions across corporate, commercial, and investment banking, treasury, and trade solutions, as well as markets and securities services.

However, the company has started looking for a buyer, as per the Moneycontrol report. As per the official quoted in the report, Citibank is not closing down its consumer business but only exiting and it will not have an impact on the existing customers and staff in India.

 Apart from the institutional banking business, the company will continue to focus on offshoring or global business support rendered from centres in Mumbai, Pune, Bengaluru, Chennai and Gurugram.