Morgan Stanley gives up banking license in India
New regulations forces hand of sixth largest US bank.
Morgan Stanley has surrendered its banking license in India. Sources said the decision was caused by a reassessment of business strategy in the face of new regulations and stricter capital rules.
Morgan Stanley received the license to set up a bank in March 2012. A banking license lapses if not used for a year.
A banking license would have given Morgan Stanley access to cheaper finance and a foothold in the Indian money and foreign exchange markets.
Because of a changed environment, the firm is now planning to let the license lapse since it does not want to tie-up capital and other resources on account of a review of its strategy.
Morgan Stanley, will, however, continue to operate its investment bank in India and stay registered as a non-banking finance company with the Reserve Bank of India.
Some 400 people are employed in Morgan Stanley India across businesses such as capital markets, equity and fixed-income sales and trading, research, asset management and private-wealth management.