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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