Competition watchdog CCI has approved the proposal of HSBC to acquire retail and commercial assets of Royal Bank of Scotland (RBS NV) and wealth management business of RBS Financial Services (RBS FSPL) in India.
New Delhi: Competition watchdog CCI has approved the proposal of HSBC to acquire retail and commercial assets of Royal Bank of Scotland (RBS NV) and wealth management business of RBS Financial Services (RBS FSPL) in India.
In an order, the Competition Commission of India (CCI) noted that HSBC and RBS FSPL have relatively very few branches in India and there was presence of a large number of banks that provide services similar to the services provided by HSBC, RBS NV and RBS FSPL.
"Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and the assessment of the proposed combination is not likely to have any appreciable adverse effect on competition in India..."
"...Therefore, the Commission hereby approves the proposed combination under sub-section (1) of Section 31 od the Act," the CCI while approving the proposed merger.
In July 2010, UK-based RBS had announced it would sell off its retail and commercial banking business in India, worth USD 1.8 billion (about Rs 8,500 crore then), to British banking major HSBC.
RBS, which received a 45.5 billion pound bailout from the UK government post the 2008 financial crisis, would sell its retail and SME business in India for a premium of USD 95 million, which would be over the adjusted net asset value of the bank's businesses in the country.
As on March 31, 2011, HSBC and RBS together have 81 branches in India.
HSBC in its submission to the CCI had said except for some of the branch licences to required to continue its business, RBS NV would surrender its branch licenses.
"HSBC would apply to the RBI for obtaining the licences for its new branches to continue the business being acquired under the proposed combination," CCI said quoting HSBC's submission.
Even after the sale, RBS has said it would continue to retain its wholesale and investment banking businesses in India.