The Competition Commission of India (CGI) has approved the Rs12,325-crore merger deal between Axis Bank and the Citibank announced on 30th March, paving the way for the former to add 30 lakh new customers as it seeks to expand and consolidate its market position. Here is what is means for Citibank’s existing 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, which is the major portion of the deal. Citigroup had entered India in 1902 and started the consumer banking business in 1985.

 

Axis Bank Ltd, Citibank, N.A. (acting through its India branch), and Citicorp Finance (India) Ltd are the parties involved in the transaction.

 

Transition period:

 

The lenders stated in March that the transition would take 9-18 months, with the option of an additional six months. The transition cost will be around Rs1,500 crore, of which Axis Bank will pay Rs1,100-1,200 crore. Customers of Citi will be gradually transferred to the Axis Bank platform.

 

KYC will be performed again following the merger, as required by the regulator. Banks will also require specific consent in the transition processes prior to the closing date.

 

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.

 

Citibank customers have now received a mail from the Bank requesting for consent for transfer of their Citibank relationships to Axis Bank. 

 

The mail sent by Citibank says ”If you do consent, it will also serve as a reconfirmation of the consent already provided by you under the terms and conditions for transfer of all associated data, information and tax documents to Axis Bank (as permitted by applicable regulations) for continued offering of banking services, including any KYC related compliance. This is just the start of the process and rest assured will have no immediate impact on any product(s) held by you, leading to the completion of the transfer, which is expected in the first half of 2023 (Effective Date)”. 

 

For a seamless experience and hassle-free transfer of your products and services to Axis Bank, existing customers of Citibank are advised to submit their consent to the transfer. Citibank has mentioned that no additional documentation or KYC details are required.

 

In case an existing Citibank customer declines to transfer, itwill lead to closure of applicable products and services with due notice as Citi India will no longer be able to provide these products and services on and from the Effective Date. In such a scenario, the customer will have to register your alternate bank account / credit card for payment to billers, mutual funds, EMIs, etc. Outstanding dues will be assigned to Axis Bank and will be payable to Axis Bank.

 

How to give your consent

 

You can share your consent to transfer your products to Axis Bank in 3 ways:

 

1) . Login to Citibank Online or Citi Mobile® App; 

 

2)  SMS YES < space > last 4 digits of your credit card number to 52484 / 98807 52484 from your registered mobile number; 

 

3) Simply click on the button in the email which has been sent by Citibank seeking consent

 

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.

 

Branches:

 

The branches won't change either. Axis Bank said that the branches will stay the same, stressing that it would preserve most Citi branches as they are in desirable locations and are used by consumers. It added that the current services will either remain the same for customers or they will be improved after the merger.

 

Credit cards make up the majority of the deal, which entails the transfer of verticals from Citi India to Axis Bank, including personal wealth management, portfolio management, and retail client accounts.

 

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.

 

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% 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."

 

Axis Bank and Citi signed a definitive agreement in March for the transaction, which is expected to be completed by September 2024 and will provide Axis Bank with access to 30 lakh new customers.

 

Earlier this week, CCI said in a tweet that it has approved the "acquisition of Citibank, N.A.'s and Citicorp Finance (India) Limited's undertakings comprising their consumer banking activities by Axis Bank."