Mid-sized private lender Ratnakar Bank on Friday said it has acquired British banking major RBS' business banking, credit cards and mortgage portfolio for an undisclosed sum.
The deal comprises transfer of 1.2 lakh customers but the asset base involved was not immediately known. All of RBS employees will be retained.
"(We have) agreed to acquire RBS' business banking business, credit cards business and mortgage portfolio in India, subject to approvals from Competition Commission of India," a statement from the unlisted bank, founded in 1943, said.
"Employees of RBS associated with these businesses are proposed to be absorbed by Ratnakar Bank," it added. The bank's head of strategy and markets, Rajeev Ahuja, said RBS has built a high quality business rich in current accounts and added that the transaction will help the lender fast track growth.
The Kolhapur, Maharashtra-headquartered bank has a customer base of 5 lakh with a book of Rs. 14,500 crore.
RBS has already announced plans of reducing its footprint in the country and has already stated that it will be holding only 10 of its branches in the country by end of 2013, down from a peak of 31.
In the statement, RBS said the sale is in line with its plans. "The deal comprises over 1.2 lakh customers. RBS is fully committed to support impacted customers and will be writing to inform on the next steps for them."
The British lender maintained the deal will have no impact on its corporate and institutional business (markets and international banking) or private banking businesses.
RBS had struck a deal to sell its retail and commercial banking businesses to its peer HSBC, but the pact fell as it was not cleared by the sector regulator RBI.
Ratnakar Bank said the transaction complements its existing business and would help it strengthen base in the targeted product and customer segments.
The deal will also enhance the private lender's low-cost current and savings account deposits in a "in a very short span of time", the statement said.
The 70-year-old private lender assured the RBS customers will continue to get all services they have been receiving till now.
Ratnakar Bank completed a second round of equity capital raising worth Rs. 324 crore from global and domestic investors by issuing three crore new shares in April this year, taking the total infusion over the last two years to over Rs. 1,100 crore.
PricewaterhouseCoopers were the advisors to Ratnakar Bank for the deal, while Morgan Stanley and RBS M&IB Asia Pacific advised RBS, the statement added.