The RBI has refused to give its approval for the purchase of RBS India’s retail and commercial assets by HSBC. The regulator has questioned RBS as to why they are doing the deal at all. It is for HSBC and RBS to now satisfy the regulator, reports CNBC-TV18’s Gopika Gopakumar quoting sources. CNBC-TV18 learns that the HSBC-RBS deal was announced a year ago. However, this deal could be stalled now because the RBI is not convinced yet, and hence, it has denied approval for this deal. Sources say that the bank has questioned RBS on a necessity of this deal and as to how they will do priority sector lending once they sell-off all their retail and commercial operations to HSBC since foreign banks have to do 32% priority sector lending. Earlier, RBS was looking to sell around 31 branches with 1800 staff to HSBC. RBS tells CNBC-TV18 that they will continue to work closely with HSBC and the regulators to get approval. “We also look forward to completing the deal in a matter that satisfies regulatory requirements,” added the bank. On the other hand, HSBC has said that they will continue to engage with the regulator and await its approval. However, sources confirm that the RBI is clear on its front and the ball is now in the court of RBS and HSBC to negotiate and comeback to the regulator with a satisfactory explanation.
Moneycontrol
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