Exclusive: The ‘C’ rating that could impact Citibank’s deal with Axis Bank

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Editor's note: The Reserve Bank of India pulled up Citibank India over its asset quality and business practices just months prior to the bank putting its retail business on the block.  On 27 January 2021, the RBI asked Citibank India to improve its “hygiene” in opening current accounts and said it had observed “deficiencies” in the “identification” of non-performing assets, along with certain other shortcomings, according to the confidential risk mitigation plan shared with the foreign bank along with the RBI’s risk assessment report for the 2019-20 fiscal year. The Morning Context has accessed the risk mitigation plan, containing a synopsis of the report’s findings and suggestions on corrective measures.  Citibank put its India retail business on sale in mid-April 2021. That business was picked up, after a year-long process, by Axis Bank for $1.6 billion in a deal announced on 30 March this year.  Insiders at the New York-headquartered bank suggest that these observations could have had a material impact on the business at the time of the sale. That, in turn, raises fresh doubts on how the deal with Axis …