HSBC to shrink Bangladesh operations, close 6 branches [ Tritiyo Matra News ]

HSBC to shrink Bangladesh operations, close 6 branches

Local May 19, 2016

The United Kingdom-based HSBC bank has taken approval from Bangladesh Bank to close down six of its 13 branches in Bangladesh by June 30, said officials of the Bangladesh Bank.
BB officials said that the bank might have taken the move to shrink its Bangladesh operations with an ultimate target to wind up from the country in line with the bank’s initiative to scale down global operations to rein in costs.
When asked about the move to shrink Bangladesh operations, Talukdar Noman Anwar, Head of Communications of HSBC in Bangladesh, on Wednesday said that they would not make comment on ‘market rumour’.
The BB in a letter provided no-objection certificate to the multinational bank on May 12 for closing down six branches by June 30, 2016 although the central bank had initially denied to give the NOC, a BB official told New Age.
The six branches which are going to be closed are Karwan Bazar branch, Banani branch, Chawkbazar branch, Narayanganj branch, Mymensingh branch and Sylhet branch.
Once the bank closes down the branches, it will not have any branch in any district other than Dhaka and Chittagong.
The BB official said that the bank had submitted four letters to the central bank between February 16 and May 4 to get the NOC to close down its branches.
The BB initially denied providing the NOC to the foreign bank as it (central bank) thought that the HSBC decision to close the branches would put an adverse impact on the country’s financial sector, he said.
Due to HSBC’s decision, the foreign business groups may think that the business environment in Bangladesh is not good enough for them, he pointed out.
In its letters, HSBC said that it would close the branches in line with its business strategy.
The officials of HSBC informed the central bank officials that the bank would expand banking operation where its business is strong and shrink the activities in the weak zone.
Earlier, in 2012 UK’s Financial Times had reported that HSBC was closing down Bangladesh retail banking operations which the company denied at that time.
More than 15,000 clients are now operating their accounts with the six branches of the bank and they might face difficult situation due to the closure of the branches, the central banker said.
The BB asked the bank to inform the clients of the six branches on paper about the closure of the six branches, according to the central bank’s NOC.
The central bank asked HSBC not to impose any charge to close or transfer the clients’ accounts to other branches.
The bank will not be allowed to sack or force to resign the staff of the six branches. Around fifty officials are now working at the six branches.
The foreign bank will have to provide the maximum financial benefits under the different packages if any staff of the six branches take decision to voluntarily resign or join other banks.
The bank will have to publish two advertisements at least in two newspapers in two days in a row to inform the clients about the closure of the six branches.
The foreign bank will have to attach an announcement for six months with the closure of branches to inform the clients where they will communicate to operate their accounts.
The bank will have to inform the central bank on paper within three working days after closing the branches.