HSBC Holdings will shut its private banking business in India, a spokesman said, marking the exit of another foreign bank from the cut-throat business in Asia’s third-largest economy.
“After a strategic review of the global private banking operations in India, we have decided to close the business,” the Mumbai-based spokesman said. “This marks further progress in the HSBC group strategy to simplify business and deliver sustainable growth.”
Many foreign wealth managers had scrambled to open up shop in India a few years ago and aggressively ramped up operations to take advantage of robust economic growth, only to find themselves struggling.
Even though India’s economy has been minting millionaires at a strong pace, it has failed to translate into profits for the foreign wealth managers that have set up teams of well-paid bankers to help manage those riches.
The bank has figured prominently in Indian investigations to crack down on black money, a key poll promise of the Narendra Modi-led BJP government.
In 2006, Herve Falciani, an ex-employee of HSBC Geneva, leaked a list of bank accounts to the French government which included more than 600 Indians suspected to be stashing illegitimate money in Swiss banks.
These financial institutions have historically been reticent about sharing details with governments but in September, Swiss authorities passed legislation seeking to amend laws allowing the government to share information with other countries on the basis of “stolen data”.
A month later, revenue secretary Hasmukh Adhia said as many as 132 prosecution in 43 cases out of the HSBC Swiss list have been filed.