labels: hdfc bank, citigroup, banks & institutions
HDFC, Citi cancel tie-up for cross-salesnews
16 July 2007

Mumbai: Housing Development Finance Corporation (HDFC) and Citigroup have cancelled the tie-up under which the American bank''s Indian network would start selling the Indian home financier''s loan products.

The two entities had signed an operating agreement for cross-selling each other''s products after Citigroup increased its stake in HDFC to 12.3 per cent and nominated its representative on the HDFC board.

Citigroup now say its stake in HDFC is a financial investment.

Banking sources said Citigroup and HDFC are not going ahead with their plan, as it would have created a conflict of interest between HDFC BANK and its promoter, HDFC. HDFC Bank has not launched its own home loan products and instead sells HDFC loans for a fee. HDFC holds around 23.32 per cent in the bank.

HDFC and Citigroup had plans to expand their cross-sell relationship beyond home loans, which were to be sold based on the mortgage lender''s risk criteria.

 


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HDFC, Citi cancel tie-up for cross-sales