Royal Bank of Scotland Group (RBS) has entered into an agreement with HSBC to sell its retail and commercial banking businesses in India.

According to the RBS, the sale includes a premium of up to $95m over tangible net asset value of the businesses being sold on closing, subject to closing adjustments.

RBS’ retail and commercial banking business comprised 1.1 million customer relationships. As at March 31, 2010 the businesses comprised gross assets of $1.8bn and the RWA’s $1.1bn.

Upon completion of the transaction, over 1,800 staff employed by the RBS will be transferred to HSBC.

However, RBS has added that it will continue to operate its Global Banking & Markets (GBM), Global Transaction Services (GTS) business and RBS private banking, with a work force of over 280 people.

Bruce Van Saun, group chief financial officer for RBS, said: “We have made excellent progress in recent months with our disposal of non-core assets, resulting in over 20 businesses sold so far. I am delighted that our retail and commercial banking colleagues and customers in India will now become part of HSBC, one of the largest and most successful banking groups globally.”

The transaction is subject to regulatory approvals, and is expected to be completed in the first half of 2011.