Barclays, that has been facing a tough time since the financial crisis hit the globe, seem to stop disbursing personal and business loans in India. There is news that Barclays has shut its divisions overnight.

However a spokesperson from the bank has refused for any such move. "Given the fact that we are in a silent period, we are not in a position to share details of our current business strategy with you," said the spokesperson.

On the other hand there are sources that have confirmed that the bank has discontinued on its personal and business loans since mid-December. Meanwhile the credit card business of the bank is still operating but the bank has reduced the credit limits of the cardholder by a huge amount.

In fact the sources said that the bank is also laying off employees. The human resources department see a cut of 25 employees every week, informed the sources.

Commenting on this, the bank's spokesperson said: "Barclays continually reviews its operations and resources so that they function efficiently as business needs and customer requirements evolve. In the current market conditions, this is particularly important."

Presently the bank's premier banking division is been used to sell intermediary products like unit linked insurance plans, mutual funds and others. Therefore the employees engaged in this department are highly pressurized.

In May 2007, Barclays had started its retail operations business in India. The Bank was known for paying salaries that were earlier not availed in the banking sector. "We are here to serve the masses. We are here to stay, to be a formidable force in the market," said Samir Bhatia, Managing Director of Barclays India, at the launch of the operation.

Barclays had been increasing disbursing loans since its launch and this led to a rise in the number of bad loans also. A former employee with the bank said, "The need to capture the market quickly led to indiscriminate lending to almost everyone and at times, even below market rates." It was due to this pattern of lending that the bad loans increased and the bank had to shut down the loan business.

The employee said that the bank also shut down its personal loan operation because the non banking finance arm of the bank, Barclays Finance was already extending the facility of personal loans. But sources informed that even Barclays Finance has been asked to go slow on increasing the customer dealing.

"It has been asked to be careful about the credit history and profile of customers to keep bad loans under control," said the employee.