UBS India, the domestic franchise of Swiss banking major UBS Group which last month surrendered its banking licence, has started laying off around 50 people, who are affected by the decision.
When asked, a UBS spokesman said: "Around 50 redundancies (confined to the employees of the bank branch) are envisaged between now and the end of the second quarter of 2015."
On the severance package being offered to the employees who are to lose jobs, the spokesman told PTI today that "the group considers such information confidential." Whether the bank is offering the affected employees any redeployment options within the group's other businesses, he said, "the bank is actively seeking redeployment opportunities for the affected employees wherever possible."
On June 21, UBS India had decided to surrender its banking licence to the RBI after sitting over it since 2008, as part of the group's "capital light strategy" and to reposition the balance sheet, with a view to sharpen its focus on the core businesses in equities and corporate client solutions.
According to sources, UBS started distributing letters of termination last Friday and is said to be offering a compensation package of one-month's pay for every year of service completed, which is the practice amongst investment bankers in the country. UBS India has just one branch in the country, based in the megapolis.
UBS is the third foreign bank after the Wall Street giants Morgan Stanley and Goldman to surrender their banking licences in the country in recent past. "UBS is in the process of trimming its operations here and has moved the RBI in this direction. The move is a part of its global plan to be present in the capital light businesses to conserve capital and quit capital intensive businesses," had said while deciding to surrender its banking licence here. The UBS decision came amid RBI opening new banking licences.
Another foreign lender DBS Bank last week said that it was open to going the subsidiary route in the country and had planned to treble its branches in over the next decade.
The bank expects two-three years to complete the process and also ruled out selling these business to someone else. The bank will continue its equities, international banking, M&As, and corporate advisory businesses in the country.
While UBS wealth management business here is four years old, it began the equities business in 1996 with UBS Securities India, a fully-owned subsidiary of the parent UBS Group, which will continue to function.
In the annual monetary policy statement on May 3 this year, the RBI had proposed a new banking structure involving differentiated licencing regime for domestic and foreign banks instead of granting of universal banking licence.
For instance, the RBI had allowed American Express to open an office to manage credit card and travel card businesses here without a banking licence. UBS has been reducing its advances and deposits in the country with a view to trim its capital requirement. According to the RBI data, advances by UBS India stood at Rs 631 crore in FY12, down from Rs 685 a year ago.
© 2025