Regulator Reserve Bank of India has denied the acceptance of the much talked over takeover of Royal Bank of India India's retail and commercial operations by HongKong and Singapore Banking Corporation (HSBC).

The deal which was in the process of nurture since the last one year nearly. RBI has its own concerns behind holding back its approval of the takeover.

The prior concern of the apex bank is that once RBS sells of its retail and commercial operations, then how would it manage to meet its priority sector lending targets which are a mandate to be fulfilled by every bank.

Foreign lenders have directives to cater 32% of their total lending to priority sector.

RBS is keenly looking into working out a solution in this regard. "We also look forward to completing the deal in a matter that satisfies regulatory requirements," the bank quoted.