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 USD 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.
The bank had earlier announced thousands of job cuts as part of cost rationalisation globally. India is a "priority market" for HSBC and the bank continues to invest here, a spokesperson said.
The private banking business used to offer "onshore" wealth management advisory to clients, which included investments in mutual funds, bonds, debentures and other structured products.