......However, the Reserve Bank of India (RBI) was not comfortable with the structure and directed the banks to re-work the deal. It is learnt that the banking regulator was of the view that RBS cannot sell its India branches to HSBC as part of the transaction. RBI follows a restrictive policy of offering branch licences to foreign banks. In a year, the RBI typically offers foreign banks around 12 branch licences in total. As per the revised structure of the deal, RBS was supposed to surrender its branches to RBI while the banking regulator will finally decide the distribution of these licences among foreign banks in India. While sources indicated that RBI had permitted the transaction as per the re-worked structure and has allowed transfer of some RBS branches to HSBC, the deal was called off as the banks failed to reach an agreement on certain parameters......
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