Standard Chartered Bank to consolidate private banking business

MUMBAI: The Indian unit of Standard Chartered Bank has decided to consolidate its private banking business by relocating some of its relationship managers in centres such as Chennai, Bangalore and Kolkatta to Mumbai and New Delhi after being hit by cases of mis-selling of debt securities, earlier this year.

"After the incident of mis-selling, the bank had run a compliance audit and, in a bid to ease the selling process, the bank has decided to consolidate its business," said a person with knowledge of this development. A bank official, who spoke on the condition of anonymity, said that the operative business model was being changed to ensure better allocation of resources and compliance checks.

According to him, there will not be any job losses and relationship managers in Chennai, Bangalore and Kolkata would be moved to the new hubs - Mumbai and New Delhi - as the bank reckons that it is a better business model since customers can also be serviced at the bank branches.

A Standard Chartered Bank spokesperson said that information relating to the bank shutting down what is known as booking centres for private banking in a few cities was untrue.

"There is no change in our wealth management business, which is seeing strong growth and we continue to hire frontline staff to service customers better. We are aggressively hiring and aim to increase our relationship managers across Private Banking, Priority Banking, SME Banking and Wealth Managers by over 25% over 2012-2013,'' the spokesperson said.

In the first half of 2011, the bank hired over 340 relationship managers to support its growing business. "We are not shutting our centres in South, or any other centre. We continue serving clients across cities and satellites. We have had double-digit growth in wealth Management assets under management and will continue to invest in this business," the spokesperson said.

In early 2011, a relationship manager of the bank sold debt securities to private banking clients with a promise to buy them back, according to sources in the wealth management industry. The products on offer included debentures of real estate firms and a Delhi-based education company. Investors were attracted by the buyback option - something not allowed under current regulations - and higher returns. Later, the bank helped the customer find another investor who agreed to buy the debentures.

Source: EconomicTimes