MNC bank exits retail assets business in India

Global major Standard chartered Bank exited the unsecured Personal loan business and the cards business in India on Friday.The management reasoned negative operating margins in these businesses to their employees for the exit,High interest rates round the corner &incidental voumes which are unsustainable Mr.Neeraj swaroop is heading in the right direction. News is around the corner that Stanc is looking at closing all retail business and focus on corporate financing.The bank seems to be oblivious about the fate of its employeees.What is notable is Stanc,HSBC,GE and a host of other banks were forced to exit the auto business when rates where as low as 7%.
The Indian retail market by and large has been a price driven market by leaders like ICICI (Mr.K.V.Kamath's baby)&HDFC.Banks were disbursing unsecured loans in less than a day ,based on credit records,past relationships distributing it faster than Coke or Pepsi.Banks were extending credit based on past track records(surrogate products)validating cash flows based on outflows rather than inflows and were absolutely clueless about factoring in economic slow down, future cash flows and weighing risk on the whole.Credit scoring and risk analysis would have been latin and greek to Indian credit buyers.
Rising rates ,stringent credit norms by all banks,technology in place for credit history checks credit off take in itself has slowed down considerably,Volumes in the market has dropped atleast by 50% in the first half of this year.
With cof climbing everyday and MNC banks finding it difficult to raise cheaper capital @home and abroad others too will soon fall like apack of cards.What would be interesting to watch is ,how late entrant Barclays bank shapes up their retail porfolio in the next few quarters. Homeloan Interest rates expected to touch as high as 18%,stringent credit norms,optimum due diligence &technology in the foray The great Indian credit squeeze is on its way.