Private sector lender IndusInd Bank has agreed to buy the India diamond and jewellery financing business of Royal Bank of Scotland (RBS).
While the exact size of the deal was not disclosed, the RBS’ jewellery business has a loan book of ₹4,500 crore and related deposits.
Until ownership of the loans is transferred to the Hinduja-promoted IndusInd Bank, day-to-day management of the loan portfolio will remain with RBS.
The business being sold is part of ABN AMRO Bank NV’s Diamond & Jewellery Clients operated by RBS in India. Employees within Diamond & Jewellery Clients in India will also move to IndusInd Bank and ensure seamless transition of the customer base.
IndusInd already has a diamond and jewellery financing business of about ₹1,500 crore.
Post the approval from the Competition Commission of India (CCI), IndusInd will make offers to about 30 employees of RBS.
IndusInd Bank, in a statement, said it has also entered into a partnership agreement with ABN AMRO Bank N.V. for cooperation in diamond and jewellery financing.
Strategic tie-up“This acquisition fits nicely into our strategy of creating scale with profitability in select business segments. We like this business and have a deep insight into the industry,” said Romesh Sobti, MD and CEO, IndusInd Bank.
ABN AMRO was acquired by RBS in 2007. Moreover, before taking over as IndusInd CEO and MD, Sobti was country head at ABN AMRO.
“Several members of IndusInd Bank’s senior management had been associated with this portfolio in RBS NV and prior to that in ABN AMRO Bank NV… A critical success factor in diamond financing is global client knowledge and this is being achieved through a long-term partnership agreement with ABN AMRO Bank,” the IndusInd statement said.
On the BSE, the IndusInd Bank share ended at ₹945.45, up ₹2.45 (0.26 per cent) over the previous close.
RBS has been trying to exit its operations in India since its UK-based parent went in for a government bailout after the 2008 global credit crisis.
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