HSBC to exit private banking business in India by March’16

Geneva/Mumbai, Nov 27 

Global banking major HSBC today announced shutting down of its private banking business in India that offers wealth management services.

“After a strategic review of our global private banking operations here, we have decided to close down the business,” a bank spokesperson said today.

Some 70 people working in the division headed by Shantanu Ambedkar will now be absorbed into the retail bank, officials said.

The bank made the announcement in an internal e-mail to employees earlier in the day. It comes within two months of Royal Bank of Scotland also exiting the private banking business by selling it off to a company floated by a few of its senior management personnel.

It is not immediately known how much funds the bank has been managing under its wealth management business.

The spokesperson said the business will be closed down by March 2016 and select customers will be given a choice to move to HSBC Premier, its global retail banking and wealth management platform.

The British bank is also investing in HSBC Premier in India to enhance product and services suite, which can be made available to select customers, he said.

The global bank’s private banking division has been mired in a black money probe after an investigation by ICIJ, a global journalists’ collective, found out that over 1,000 Indians had parked over $4 billion in HSBC Geneva till 2007.

The bank officials were quick to dismiss any notion of the shutdown of the local private banking business being linked to the scandal and stressed that the controversy involves Indians’ accounts in HSBC Geneva.

The decision to close the business is also not a fallout of any cost rationalisation measures, officials said.

Meanwhile, Herve Falciani, the former HSBC employee whose disclosures uncorked the “Swissleaks” scandal on bank-supported tax evasion, was sentenced in absentia today to five years in prison.

Falciani, who worked as an IT specialist with HSBC, had been charged in the southern Swiss town of Bellinzona with industrial espionage, data theft and violating Switzerland’s long-cherished banking secrecy laws, Switzerland’s ATS news agency said. 

The 43-year-old French-Italian national refused to travel to Switzerland to appear at trial.

Falciani can appeal his conviction at Switzerland’s highest court, but he will not serve any prison time in the federation so long as he remains in France, which does not extradite its citizens.

The former HSBC employee leaked a cache of documents allegedly indicating the bank’s Swiss private banking arm helped more than 120,000 clients hide 180.6 billion euros ($205.4 billion) from tax authorities. — Agencies