In April 2021, Citibank had announced that it would be exiting the retail businesses, including credit cards, retail banking, consumer loans and many other such lines of business in 15 geographies in Asia and Europe, including India. Their rationale was that the business did not gain scale in these geographies and hence they did not want to commit anymore resources to these markets. Here at LiveFromALounge, it was of interest, because Citi arguably ran a couple of the finest credit card products in India, including Citi Prestige and Citi Ultima Infinite.

Since 2021, many names were floated about who would finally buy the India business, including Kotak Mahindra Bank and Axis Bank. However, today, we know that Axis Bank will finally buy the business.

Citibank to sell retail business in India to Axis Bank

The transaction comprises the sale of the consumer banking businesses of Citibank India, which include credit cards, retail banking, wealth management and consumer loans. The transaction also includes the sale of the consumer business of Citi’s non- banking financial company, Citicorp Finance (India) Limited, comprising the asset-backed financing business, which includes commercial vehicle and construction equipment loans, as well as the personal loans portfolio.

The transaction Will also include approximately 3,600 Citi employees supporting the consumer businesses in India, who will transfer to Axis upon completion of the proposed transaction. Axis will pay Citi a cash consideration of approximately USD 1.6 billion for the acquisition of the consumer business, subject to customary closing adjustments.

The transaction is expected to close in the first half of the calendar year 2023 subject to requisite regulatory approvals. This announcement is only the start of a process, and while there will be a transition, Citi will ensure that it is done in as seamless a manner as possible, with due notice. There will be no immediate impact on the services to the customers of Citi’s consumer businesses in India.

Here is a note posted by Citibank as you head to the India website of the Bank.

How will this affect Citi Credit Cards?

Here are the FAQs about credit card customers posted on the Citi FAQs about the transaction. I’ve only posted the ones I feel are relevant to you and me.

What will happen to my credit cards, personal loan, EMIs and add-on credit cards?

• There will be no immediate change to any product you hold with us, be it credit cards, loans, deposits, investments, or any others. The products that you hold with us remain active for usage and the benefits you enjoyed will remain unchanged for now.
• We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice.
• The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals. This announcement is only the start of a process, and while there will be a transition, we shall ensure that it is done in as seamless a manner as possible, with due notice.
• Your products will eventually be migrated to Axis Bank. We will engage with you in due course in relation to the migration of your products and services to Axis Bank.

What happens to limited time offers on my credit card? Will the offer still hold valid?

• Yes, all ongoing offers will continue to be fulfilled if you qualify per the campaign mechanics and eligibility criteria.
• We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice.

What will happen to Citi reward points, turbo points & miles? Is it best to redeem them all now?

• All your existing Citi rewards points, turbo points and miles remain valid on your credit card.
• You will continue earning rewards points for all eligible spends on your credit card and all redemption options continue as is. There is no change in the usage or current conversion or redemption rates.
• The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals. This announcement is only the start of a process, and while there will be a transition, we shall ensure that it is done in as seamless a manner as possible.
• We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice.

My credit card is coming up for renewal or I need a replacement / add-on card. Will you continue to issue it?

• Yes, we will continue to issue them. There is no immediate change in the way Citi serves you or in the way you bank with us.
• The transaction is expected to close in the first half of calendar year 2023 subject to requisite regulatory approvals. This announcement is only the start of a process, and while there will be a transition, we shall ensure that it is done in as seamless a manner as possible, with due notice.

What kind of credit card will I be migrated to with Axis Bank?

• We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice.

Impact Analysis

The big news here is, that Citi will be still running the business for a while (at least 9 months) and there is a lot of headroom for current Citi customers to decide how they want to approach their relationship with Citi going forward. Secondly, as I’ve been saying for a long time, Citi will give notice to customers before they transition them to Axis Bank. So, there is no reason to worry if you are a Citi customer.

Bottomline

Citibank will sell its retail business in India to Axis Bank, including the Credit Cards and Retail Banking business. The transaction is expected to close in early 2023, and Citi says that it will give notice to customers before the transition is done.

What do you think of Citi’s sale of its retail business to Axis Bank?

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