According to sources, the list of contenders for this regional buyout is led by ABN Amro and Citibank--two players with major retail plans and a broader interest than just the Indian market. Indian bidders interested purely in the bank's domestic assets may lose out. ICICI is understood to have made a pitch for BankAm's India business, but it is reportedly preparing to back out as the sale is to be hammered on a global front.

Banks like ABN Amro and Citibank are believed to have begun negotiations to buy out BankAm's Asia-region retail business in India, Malaysia, Indonesia and Thailand. BankAm plans to retain its retail operations in HongKong.

Sources said that the final deal will be a dollar-denominated transaction where local taxation and premium-related issues will be taken care ofdepending on the individual country's laws. The plan to sell off the full retail book across Asia as a one-shot transaction holds immense appeal to BankAm as it will significantly cut down administrative and other related expenses.

It seems that BankAm will also sell off its liabilities side of the business in India as it plans to concentrate on high net worth individuals rather than small savings accounts. This aspect may put a spanner in the plans of those buyers who are interested in specific portfolios of BankAm. For example, GE Caps being a non-banking finance company may not be interested in buying out the full book of BankAm's retail business, including retail deposits, or, say, the advance-against-shares portfolio.

However, if BankAm does not strike a suitable across-the-region deal, the subsequent piecemeal sale of its retail business will see the re-entry of such contenders. According to sources, this is precisely why GE Caps has not even begun a due diligence exercise for BankAm's business inIndia as it will wait a while to see how the global front develops.

An analysis of the current situation by industry observers points to ABN Amro being the most serious contender based on the bank's thrust in Asia for retail banking over the last year. A buyout will help ABN get direct access to many markets. As for Citi, a buyout of the entire book will serve to consolidate its already strong retail presence.

Local players will stay out

Exiting India in the retail business becomes part of international-level negotiations being hammered overseas with BankAm indicating interest in disposing of its pan-Asian retail business. Specifically for its Indian retail operations, the indication is that it will either sell its assets and retire liabilities or sell the business as a going concern. In either case domestic banks and institutions that would have jumped at the chance of buying good quality assets will not be involved as it is no longer a local gambit. Therefore, there will be little interestamongst domestic banks and FIs under the circumstances and no reason for the domestic banking sector to have a great interest in this sale.