Last week, CitiBank sprung a surprise on its customers by abruptly closing their accounts in preparation for the merger of its operations with Axis Bank by the end of March 2023.
In the process, many clients having their primary and business critical accounts with CitiBank found that their business was disrupted.
In earlier mergers this kind of a situation did not arise since the accounts were automatically transferred to the new entity and it was left to the customer to decide what to continue their relationship with the new entity or not over a period of time.
In the meantime, in the earlier mergers of Corporation Bank-Union Bank, all cheques and standing instructions related to the old accounts continued to be operative and no inconvenience was caused to the customers.
It is not clear why Citi Bank adopted this move and why RBI did not prevent this inconvenience caused to the customers.
We are not aware if RBI was aware of this move and had approved it or Citi Bank had kept RBI in the dark. Also, did Axis Bank take the trouble of informing the erstwhile customers of Citi Bank that such a move was contemplated by Citi Bank ?. The customers of Citi Bank are now the responsibility of Axis Bank and they need to preserve their own reputation for customer service and they seem to have failed in this obligation and opportunity.
It is time for some consumer oriented lawyer to file a PIL and ensure that CITI Bank pays damages to all its customers for suddenly stopping operating accounts and causing both material and reputational harm to them.
I am trying to figure out if there was any technical reasons for this fiasco. In earlier cases of mergers the merged entity continued to operate the account under the same account number for some time until it was migrated to a new account number. Even the standing instructions and cheque books continued to be operative till they were replaced and migrated.
It was surprising why this did not happen in the Citi Bank-Axis merger case. It is not clear if this was handled like a merger under RBI supervision or a business acquisition. In that case Axis Bank had to be pro active and provided some easy options to customers for migration. Difficult to imagine why Axis Bank failed to use this marketing opportunity.
It should have been possible to set up an intermediary authentication system to direct the customers to the specific data base of account holders transferred to the control of Axis Bank. Probably Citi Bank did not want to help Axis Bank acquire the customers easily and Axis Bank failed to negotiate the merger/acquisition properly. Whichever consultant handled the transition has failed in his duty to guide Axis Bank properly.
We await more information to unfold in this regard from RBI.
Also see this article on which consultant handled this acquisition so inefficiently.
My account closed on 15th Feb and yet not transferred funds from account to new account even after several follow up, not sure about RBI is monitoring this or not
This was total mess created by citi and and axis Bank …i missed my emis despite of having money in account ..and i am still waiting for my payment after closing account ..no proper response from citi or axis Bank ..very bad on RBi ignoring customer pains and suffering