Royal Bank of Scotland has been forced to call off the sale of its Indian business to HSBC despite the taxpayer-backed lender effectively paying its larger rival to take the unit off its hands.

RBS said the sale of its Indian commercial and retail operations to HSBC had “lapsed” and that it would now begin the “wind-down” of the 31-branch business. Under the original terms of the July 2010 deal, HSBC agreed to pay as much as £63m for the operation. However RBS agreed to bear up to 90pc of any losses made by the unit for the next two years, meaning that it was expected to effectively end up paying HSBC to buy the unit. The collapse of the deal is understood to have followed protracted talks with the Indian regulator over the transfer of the ownership of the business from RBS to HSBC. In a statement RBS said there would be “no immediate changes for customers” and that following its decision to shut down the operation it would attempt to “minimise disruption”. India only represents a tiny fraction of RBS’s global business, accounting for just 0.02pc of group assets and about 0.5pc of the so-called “non-core” business the bank has said it will sell off.....Read more here: RBS Indian deal collapses despite 'paying' HSBC to buy unit - Telegraph