MUMBAI (Reuters) - Royal Bank of Scotland Group Plc (>> Royal Bank of Scotland Group plc) is in talks to sell its Indian private banking business to Sanctum Wealth Management, a firm set up by its local private banking business head Shiv Gupta, a spokeswoman for the bank said on Monday. Switzerland's Union Bancaire Privee said in March it was buying the overseas business of British wealth manager Coutts from RBS, as part of the bank's drive to pull back from foreign markets and focus on UK retail and commercial banking. RBS' India private banking business was not part of that deal. RBS has signed a non-binding framework agreement and is now in discussions to sell the Indian private banking unit to Sanctum Wealth, the spokeswoman said in an e-mailed statement, without giving details. "This marks another step towards delivering the strategy to make RBS a stronger, simpler, more sustainable business, more aligned with the needs of our customers in the U.K. and Western Europe," the statement said. A source with knowledge of the transaction with Sanctum said RBS India private banking managing director Gupta could rope in some private investors in Sanctum Wealth after the transaction was completed. In India, RBS competes with global banks including Barclays Plc (>> Barclays PLC), Citigroup Inc (>> Citigroup Inc), Standard Chartered Plc (>> Standard Chartered PLC) as well as a host of domestic financial firms in the wealth management business. Many foreign wealth managers had scrambled to open up shop in India a few years back and aggressively ramped up operations to take advantage of robust economic growth, only to find themselves struggling. Although Asia's third-largest economy has been minting millionaires at a strong pace, it has failed to translate into profits for the banks that have set up teams of well-paid bankers to help manage those riches. Cut-throat competition, high staff costs and weak markets are squeezing revenue of the top private banks, while growth opportunities are limited by regulations that restrict product offerings. Faced with these challenges, Morgan Stanley (>> Morgan Stanley) in 2013 decided to sell its India wealth management unit to Standard Chartered, after entering the fiercely competitive market about four years ago. Some industry executives, however, say that the long-term prospects of the private banking business in India remains attractive, as a pickup in the country's economic growth is expected to boost the number of high net worth individuals. (Reporting by Sumeet Chatterjee, editing by Louise Heavens and Susan Thomas) By Sumeet Chatterjee
RBS has revealed that it is in talks to sell its Indian private banking business to Sanctum Wealth Management; RBS has signed a non-binding framework agreement and is now in discussions around progressing the sale. "This marks another step towards delivering the strategy to make RBS a stronger, simpler, more sustainable business, more aligned with the needs of our customers in the U.K. and Western Europe," yesterday's statement explained; RBS' retreat from non-core operations continues.