Retreat of foreign banks in India due to various adverse trends
Over the years, foreign banks have shown a tendency to limit their business in India. While most of these institutions have maintained their reach in the institutional and investment banking sector, they have stayed away from retail banking. Citigroup recently sold its retail business to Axis Bank in a cash deal. The deal was worth about ૬ 1.5 billion. In the past, FirstRand UBS, Barclays, BNP Paribas, HSBC and RBS have limited or stopped their retail business. This is due to the complex compliance requirements of the Reserve Bank of India and the competitive nature of the retail banking sector. There is no doubt that there is a large middle class in the country which is very much interested in financial planning. In addition, there is a new class of highly competitive local banks and non-backing financial companies and fintech companies in India who are eager to serve in this field. Foreign banks are not able to compete with local banks in terms of business size and are reluctant to