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    Axis Bank CEO Amitabh Chaudhry on how the Citi deal will work

    Synopsis

    “Once the consideration is paid and consent of customers taken, the technology platform has to be tackled and Axis will gradually start migrating the customers of Citibank of different parts of their business to Axis Bank. As for payment, right now, we can easily pay it out of our balance sheet.”

    Amitabh Chaudhry, Axis Bank-1200ETMarkets.com
    “Once the consideration is paid and consent of customers taken, the technology platform has to be tackled and Axis will gradually start migrating the customers of Citibank of different parts of their business to Axis Bank,” says Amitabh Chaudhry, CEO, Axis Bank.

    1. How much is the Citi deal going to cost Axis Bank?
      The consideration which has been paid to Citibank is Rs 12,325 crore. This will be paid sometime between 9 and 12 months from today which we are calling the LD1 date. The total transaction will take 9 to 12 months upfront and another 18 months post that.
    2. Why will the process take that much time?
      We need to ensure regulatory approvals. We need to get some clarifications from the regulator in terms of some of the requirements which Citibank needs to fulfill. We also need to work on customer consent and ensure that all those customer consent has been obtained. Axis has entered into an agreement with Citibank where they will provide technology transition services and there’s also an agreement where Axis can continue to use the Citibank brand for some period of time. So this transaction will take 9 to 12 months upfront and another 18 months post that.
    3. How is this deal going to be funded? Will capital be raised?
      We have a very strong balance sheet. Right now, we can easily pay it out of our balance sheet. It will have an impact of 180 bps on our capital ratios. We are a growing franchise. A growing franchise needs capital on a regular basis. Yes, with this deal we will have to raise capital maybe earlier than what we anticipated but we are not in any hurry. We are not under any pressure. We will do it at the right time.



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    (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2024 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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