As the Axis Bank-Citi deal has got approval from the Competition Commission of India (CCI), the amalgamation has moved an inch towards merger reality. The Rs 12,325-crore deal involves the merger with Citi’s personal loans, credit cards and wealth management businesses that are focused on the affluent segment, with Axis Bank. Here’s what it means for customers:
The deal includes the transfer of verticals like personal wealth management including portfolio managing and retail customer accounts segments from Citi India to Axis Bank, and credit cards are the major portion of the deal. Citigroup had entered India in 1902 and started the consumer banking business in 1985.
Transition Period: The lenders in March had said the transition will take 9-18 months with the flexibility of an additional six months. The transition cost will be about Rs 1,500 crore; out of this, Rs 1,100-1,200 crore will be paid by Axis Bank. The Citi customers will be gradually shifted to the Axis Bank platform in a gradual manner.
Impact On Services: After the merger of Citi’s retail banking business with Axis Bank, the current features and benefits of the credit cards and other services will remain the same for customers or they will be enhanced. Axis Bank officials have also said that the customers will not see any change in the people they interact with in the bank, and customer experiences will remain the same or will be improved further.
After the transition is over, Citi’s retail customers will become Axis Bank’s customers, and the customers will have access to Axis Bank technology and wider offerings.
Know Your Customer: After the merger, KYC will take place again, which is the requirement of the regulator. It happens periodically. The banks will also need the consent of a particular kind in the transition processes before the date of closing.
Branches: The branches will not change and they will remain the same as currently. As most of Citi’s branches are at prime locations, Axis Bank has said that it would keep them to serve customers.
Axis has already said, “It will gain access to the large and affluent customer franchise of Citibank having a bouquet of fee-oriented and profitable segments, that include quality credit card portfolio, affluent wealth management clientele, meaningful deposits with 81 per cent being CASA, along with a strong consumer lending portfolio. Post the acquisition, Axis Bank will have 28.5 million savings accounts, over 2.3 lakh Burgundy customers and 10.6 million cards.”
An Axis Bank official in an interview with Moneycontrol has said the issuance of credit cards should be scaled up from Q3 (October-December) onwards. “We started the year at total CIF (cards in force) of 9 million. The RBI (Reserve Bank of India) has recently issued guidelines on card closure but if we keep that aside for a minute, I will envisage overall CIF at the end of year (March 31, 2023) at close to 12 million cards… I think these numbers are very strong. Obviously, at some point, by December or March, when the Citi portfolio gets added, it will be another 2.5 million cards,” Axis Bank (President and Head of Cards and Payments) Sanjeev Moghe said.
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