I think it's a good thing if interest rates of banks go down. Indian middle class will slowly move from saving to investing.
Citigroup to shutter retail banking operations in 13 countries including India
- Thread starter OM_2K19
- Start date
Wow, so much on threads about the closing of the Retail Business of a Bank! These things will happen and have been happening since 2007 Crisis!
ABN Amro was purchased by RBS who then split it to Core and Non Core and sold the Non Core businesses or closed them down. Many banks also followed the same approach globally in order to survive and exist!
Current Pandemic has made many changes for companies and banks. Many have merged or closed down or sold their business to potential buyers.
These sales take time in terms of documentation, regulatory permissions etc It can go on for months and years! I have seem most of it since 2010.
Those with Citi retail accounts can obviously reach out to their relationship bankers to get the latest update. As per RBI besides specific regulation around sales and mergers, customers who have bank accounts and would be impacted will definitely receive communication on this if there is a change to a new bank or if the account will be closed or if alternate options are provided. Notice to a customer is anything between 30 to 90 days depending on the type of accounts and relationship maintained.
So wait back for more news as it unfolds and next steps for those who will be impacted.
ABN Amro was purchased by RBS who then split it to Core and Non Core and sold the Non Core businesses or closed them down. Many banks also followed the same approach globally in order to survive and exist!
Current Pandemic has made many changes for companies and banks. Many have merged or closed down or sold their business to potential buyers.
These sales take time in terms of documentation, regulatory permissions etc It can go on for months and years! I have seem most of it since 2010.
Those with Citi retail accounts can obviously reach out to their relationship bankers to get the latest update. As per RBI besides specific regulation around sales and mergers, customers who have bank accounts and would be impacted will definitely receive communication on this if there is a change to a new bank or if the account will be closed or if alternate options are provided. Notice to a customer is anything between 30 to 90 days depending on the type of accounts and relationship maintained.
So wait back for more news as it unfolds and next steps for those who will be impacted.
Isn’t that moving everyone from safety (of hard earned savings) to risk taking investments which could result in profit or loss?
Would this be good if this is forced upon everyone as the only choice? (Retirees, the poor etc?)
Difficult and uncomfortable questions these may be, but they deserve a honest and clear answer and maybe a nuanced approach that caters to a variety of circumstances that our people exist in.
The biggest risk is to keep ones hard earned money in a savings bank / FD a/c.
Just a quick example. A good friend of mine retired from the gulf 2 decades back. Put all his savings into FD accounts in various banks. He was happy with the interest he was receiving 20 years back. Yes, his interest rates have dropped a few points, but his purchasing power has dropped even further. His savings have not kept up with the inflation and did not beat it by a big margin. He still has his original money with him and the value of his original money is eroded by inflation. He should have invested his retirement corpus so that it would have grow and beaten inflation.
If you have the time, please browse this site. I am not connected to the site in any way except as an end user.
https://www.valueresearchonline.com/knowledge-center/
Next in my experience it's got to be ICICI [It was better than HDFC few years back]. Their Internet banking services have improved but not much experience with their mobile banking app.
Citibank made Rs.4500 crores profit last FY. The reason they are exiting from India is that they do not have the strength to compete with local players. In addition, foreign banks cannot open branches as freely as local players. There are other restrictions also.
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@venkatcr They Exit when they have just made a profit of 4500 crores? Is this typo or are we sure of the facts?
If true, I can not make any sense of this.
Such situations are fertile breeding grounds for conspiracy theories...
Citi to exit India consumer business through sale, says customers won't be impacted - CNBC TV18
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He is right, they are making $ and have the lowest NPA.
sud98
Well-Known Member
The profit that Citi made is mostly in the wealth side of the business and corporate banking, both they will retain. Worldwide, retail banking has a very local flavour so having a MNC doesnt work. This is why the US is dominated by local banks, Europe by its own local banks, so is China and now India. Even a place like Australia, is largely dominated in retail by its own local banks.
Unfortunately, the low margin in retail banking in India means, people will cut corners in cost centres like customer service. Working with most of the banks in India for their customer service, there is no comparison to the service levels of Citibank to other banks. Amex in cards is a few notches higher IMO.
Obviously, Citi cards division is very lucrative as the avg. spend is around 20-30% higher than any of the card providers (HDFC/SBI/ICICI), but the acquirer will end up putting in shoddy service levels to maximize their margins like what happened to Deutsche or ABN AMRO cards.
Unfortunately, the low margin in retail banking in India means, people will cut corners in cost centres like customer service. Working with most of the banks in India for their customer service, there is no comparison to the service levels of Citibank to other banks. Amex in cards is a few notches higher IMO.
Obviously, Citi cards division is very lucrative as the avg. spend is around 20-30% higher than any of the card providers (HDFC/SBI/ICICI), but the acquirer will end up putting in shoddy service levels to maximize their margins like what happened to Deutsche or ABN AMRO cards.
They also had a zero balance account I think
Accounts opened under Pradhan Mantri Jan Dhan Yojana(PMJDY) have no minimum balance requirements.
By corporate banking does it also include the salary accounts business or other lending and loan and international currency exchange and transfer functions?
An anecdote I want to mention - I was completely shocked and gobsmacked one day when I walked into the Citi branch office at MG rd many years back. The office floor was teeming with vegetable vendors and rickshawallahs from the Shivajinagar area - the poor “unwashed” (literally) types in the 100s! Literally the types that will haggle and argue with you threateningly and loudly over 2 rupees for half an hour if you don’t have the change or refuse to pay the extra over meter! The posh office floor of this American bank literally resembled a railway platform where a local train arrives. At first I actually thought locals were staging some kind of protests but no. My head was reeling at the revelation because in my head Citibank was an American company that only dealt with high net worth individuals and salary accounts of multinational corporates...How wrong I was!!
I am not sure at what stage Citi decided to target the low-income group in India with very small scale entrepreneurs and proprietary businesses. Maybe they’ve now decided it was a wrong move with low returns compared to the high volume of low value transactions...
An anecdote I want to mention - I was completely shocked and gobsmacked one day when I walked into the Citi branch office at MG rd many years back. The office floor was teeming with vegetable vendors and rickshawallahs from the Shivajinagar area - the poor “unwashed” (literally) types in the 100s! Literally the types that will haggle and argue with you threateningly and loudly over 2 rupees for half an hour if you don’t have the change or refuse to pay the extra over meter! The posh office floor of this American bank literally resembled a railway platform where a local train arrives. At first I actually thought locals were staging some kind of protests but no. My head was reeling at the revelation because in my head Citibank was an American company that only dealt with high net worth individuals and salary accounts of multinational corporates...How wrong I was!!
I am not sure at what stage Citi decided to target the low-income group in India with very small scale entrepreneurs and proprietary businesses. Maybe they’ve now decided it was a wrong move with low returns compared to the high volume of low value transactions...
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