After almost two-&-a-half years of negotiations to acquire retail & commercial banking businesses of Royal Bank of Scotland in India, HSBC abruptly decided to scrap the plan.

RBS had announced the sale of its Indian retail & commercial banking businesses to London-based HSBC for an unrevealed sum in July 2010.

RBS said in a statement that its accord with HSBC terminated on 30th of November, and that it would no longer proceed with the proposed transaction. RBS added that it would keep on winding down its Indian retail & commercial businesses.

Announcing the development, the lender said, "RBS will continue to wind down the retail and commercial businesses in India in an orderly way and is exploring options for this. There will be no immediate change for customers ..."

Media had long been reporting that talks over the proposed transaction between RBS and HSBC could eventually collapse as the Reserve Bank of India (RBI) had not allowed HSBC to purchase majority of RBS' Indian branches.

The acquisition of RBS' Indian branches would have enhanced HSBC's network in the country. HSBC has fifty branches in India, while RBS had thirty-one branches.

RBS' retail & commercial businesses in India account for less than 0.5 per cent of the Group's remaining non-core assets.