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Mumbai: Citibank India has taken a novel route to securing customers’ consent to move their banking relationships to Axis Bank once the sale of its retail assets is completed, irking a section of customers.

In an email to customers on 18 November, Citibank mentioned several transactions, which if undertaken on or after 21 November, would be construed as consent to move to Axis Bank. The bank has been seeking customer consent for the transfer in the last few months, and the communication on 18 November is for people who are yet to agree to move to the domestic lender. After months of telling customers that inaction would lead to “close of applicable products", it has now taken to implied consent.

On 30 March, Axis Bank agreed to buy Citibank’s consumer business in India for 12,325 crore ($1.6 billion) in cash. A person aware of the deal said that about 60-65% of Citibank India’s retail customers by volume have so far agreed to move to Axis Bank.

“Further to such reminders, we wish to inform you that starting 21 November, we will consider any or more activities undertaken voluntary by you…as your consent to transfer all your Citi relationships (which require consent) to Axis Bank," the bank said in the email.

Transactions that could lead to customers consenting to the move include credit card spending initiated by cardholders, purchases made on credit card, cash withdrawals at any ATM, redemption of reward points and new biller registration. That apart, debit transactions initiated by account holders, excluding standing instructions and EMI payments; fund transfers including unified payments interface (UPI) and issuance of cheques would also be considered as consent. Mint has seen a copy of the document.

In an FAQ dated 25 July, titled “consent for transfer of Citi relationships to Axis Bank", Citi had said customers can continue using all existing products and services including branches, ATMs, Citi Mobile App, Citibank Online and CitiPhone Banking. “We will ensure you are duly informed of all relevant changes to your services and products, with adequate advance notice prior to transfer of the relevant products or service," it had said.

To be sure, even after one has consented to becoming an Axis Bank customer, there is a way to opt out, as per the FAQ cited above. A customer has to send a message to a number from their registered mobile number.

Emails sent to Citi India and Axis Bank remained unanswered till press time.

Some customers were perplexed about this process.

“This almost seems like arm-twisting customers into granting consent to move business to the other bank. In fact, I, inadvertently, ended up consenting to move to Axis Bank owing to a transaction I initiated after the deadline of 21 November," said Ajay Awtaney, founder and editor of LiveFromALounge.com, an India-focussed frequent-travel website.

Awtaney said he has been a Citi customer for over 20 years and this consent mechanism made him feel a bit shortchanged.

However, legal experts see no flaw in the process. “Indian law on consent is fairly easy to satisfy. Implied consent satisfies legal requirements. Clearer, more specific rules, built around consumer protection and privacy would help - but at this point the law is silent," said Mathew Chacko, a partner at law firm Spice Route Legal.

ABOUT THE AUTHOR

Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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