Royal Bank of Scotland
RBS initiates closure of branches, to shut India banking business by year end. In Picture: A sign is displayed outside of a branch of The Royal Bank of Scotland in central London, Britain May 20, 2015.Reuters File

Confirming reports that Royal Bank of Scotland (RBS) Plc would choose to wind up its India banking operations over seeking other exit options, the bank in statement on Monday announced it was closing down its corporate, retail and the institutional businesses in the country.

"After examining a number of options for our banking business in India, we decided to wind down our corporate, institutional and retail banking businesses in India," said RBS. It added that the bank will shut down all its 10 retail branches in India in a phased manner.

Earlier in 2016, the bank had initiated its corporate and institutional businesses exit and also sold its onshore loans portfolio. Its offshore loan book and private banking business were sold last year, reported Mint.

The Financial Times on April 12 reported that RBS' decision to wind up was based on the country's stringent regulations on acquisition of banking businesses within the country. "You are in limbo. Every day, the value is eroding until it becomes cheaper just to close down the operation," a senior executive complained on India's lengthy process for acquiring/selling banking entities.

However, in a statement to Reuters, its chief executive Ross McEwan had said the decision to close its India business was a part of its overall global plan to sell or shut businesses in two-thirds of the countries it operates in. The company wanted to bring down operations to 13 countries from the existing 38. The bank had also held that it was not feasible for it to sell its India businesses in its entirety and that it would consider sale of individual parts, if not an outright winding up.

Shuttering RBS' banking operation will mean a loss of 700 jobs, according to FT. However, it added that RBS' 13,000-strong back-end employees supporting global operations would continue to exist in India.

RBS said in Monday's statement: "We are committed to provide our employees with a range of support and will ensure that they are treated in a fair and transparent manner in line with RBS' principles and local policies."