Mumbai: Swiss banking major UBS has decided to surrender its banking licence in India, which includes exiting its fixed income business, forex operations, and credit services which are capital intensive.
UBS India has just one branch in the country in Mumbai. The decision comes after years of its attempts to own a retail bank here, even as it has been fighting money laundering allegations.
When contacted a UBS India spokesperson refused to comment. In the recent past, Morgan Stanley and Goldman Sachs too had surrendered their banking licence in the country.
"UBS is in the process of trimming its operations here and has moved the RBI today in this direction. The move is part of its global plan to be present in the capital light businesses to conserve capital and quit capital intensive businesses," a person with direct knowledge of the development said on Friday evening.
Accordingly, the bank closed down its only branch in the country on Friday. The move comes at a time when the Reserve Bank of India is pushing foreign banks to reorganise themselves as wholly-owned subsidiaries here for better regulation.
The decision to surrender the banking licence is in line with the group's global strategy of conserving capital and wind up its capital intensive businesses, the source added.
The bank expects two to three years to complete the process and also ruled out selling these business to someone else. The source also added that the bank will continue its equities, international banking and corporate advisory businesses here.
UBS entered the domestic equities business in 1996 with UBS Securities India, a fully-owned subsidiary of the parent UBS Group, which will continue as it is. "They will continue to service their institutional and corporate clients," the source said, adding they will also seek licence from the RBI for opening a representative office to start wealth management business here.
In the annual monetary policy statement on May 3 this year, the RBI had proposed a new banking structure involving differentiated licencing regime for domestic and foreign banks instead of granting of universal banking licence.
For instance, the RBI had allowed American Express to open an office to manage credit card and travel card businesses here without a banking licence.
Your guide to the latest election news, analysis, commentary, live updates and schedule for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Facebook page for updates from all 543 constituencies for the upcoming general elections.
Updated Date: Dec 20, 2014 22:01:18 IST