Its curtains now for Citigroup’s presence in Indian retail banking business. This includes credit cards, savings bank accounts and personal loans. The US-based lender has decided to exit 13 markets and focus on a few wealthy regions around the world.   

However, the question that has baffled everyone is that why did the lender that was in profit and which had the biggest balance sheet among foreign banks and operated on a branch model in India has to throw the towel? Let’s find out.

  • First and foremost, the regulatory framework stifled Citi’s growth in India despite its best efforts to make inroads in the country. The regulations imposed disabled the bank to build scale in consumer banking. RBI, though, did allow the overseas banks to raise branches or acquirements provided they shift from their current branch model to a wholly-owned subsidiary model. However, only the Singapore-based DBS opted for the subsidiary route and grew exponentially with its acquisition of South-based Laxmi Vilas Bank.
  • The experts are also of the opinion that upheaval caused by the COVID-19 pandemic forced bigger banks to refocus management bandwidth and capital around the world.
  • The banks were also forced into realigning their strategy of establishing a local retail model because of the COVID-19 pandemic. Moreover, new lenders like Bandhan & IDFC First as well as other small finance banks also emerged as potent competitors.

It would be worth recounting here that Citi expanded its retail business in the early 2000s and was amongst the pioneers of corporate sector salary business with its Suvidha accounts. The company did suffer a setback in the wake of the global financial crisis in 2008 which lead to its breakup. However, it steered itself out of the troubled waters in later years. 

The bank had a well-segmented wealth business that covered emerging affluent and high net worth individuals. Citibank was also a prominent player in the credit card business, though it did not scale up the business as big as some of its rivals in the last few years.

Click on the link to avail loans at the best possible rates.