The business that gobbled quite a bit of capital is not justified given that the revenue stream that it generates for the investment banking divisions is meagre, they said.

The UK bank will sharpen its focus on serving the needs of India's large corporates, multinationals and financial institutions who can benefit the most from the Barclays' complete suite of products and its international reach and presence. This exercise was done on the basis of strategic business imperatives and closer alignment to its global business lines. Additionally, it will, in a phased manner, de-emphasise coverage of its SME segment, a bank spokesperson told ET.

Also, the competition from home-grown HDFC Bank, Kotak Mahindra Bank and Yes Bank is becoming so formidable that the UK bank realised it may not be worth competing in that segment of the business, the people confirmed.

Foreign banks in India are facing a tough time because of rising NPAs and poor credit offtake. "Global headquarters are driving global strategies for these banks," said Yes Bank MD Rana Kapoor. "With capital requirements going up, foreign banks will now have to focus more on cost rationalisation," he said.

Global banks, drawn into India with the huge business potential, keep re-drawing their business plans as they figure out the local landscape is quite different from developed markets. HSBC, which a few years ago focused on the small and medium enterprises, has been scaling down.

Even the retail focus of some, such as Citibank and Standard Chartered, did not grow the way they perceived.

Barclays India would continue to focus on large corporates where it could lend money and also get investment banking mandates for cross-border acquisitions.

Barclays has started talks with other banks for selling this business. Loans which come under the Rs 200-crore to Rs 2,000-crore bracket are qualified under small and medium size loan segment.

Last week, Barclays had said it was restructuring its corporate finance business by merging the client relations team of Barclays Commercial Banking and Barclays Capital.

As part of the exercise, Barclays had asked an undisclosed number of people to look for new jobs outside the bank. More people can be asked to leave as part of the bank's restructuring process.

As on March 31, 2010, the bank's outstanding loans were at Rs 7,600 crore against Rs 10,600 crore in the previous year. In 2009-10, Barclays reported a net loss of Rs 550 crore, against a net profit of Rs 30 crore in the previous year.

Barclays also has been scouting for buyers for its credit card business and has trimmed its retail portfolio "following a sharp rise in delinquencies in 2008-09," according to rating agency Crisil's report about the bank. The report further said as part of its global banking strategy, in the corporate lending segment, the bank will focus mainly on lending to large corporates and multi-national companies. As of March 31, 2011, gross NPAs were at Rs 781 crore. This is a significant drop from its 2009-10 numbers, where the bank had a NPA of 1,400 crore.