HSBC to halve branches in India

MUMBAI: British bank HSBC has said that it will almost halve its branch network in India from 50 to 26 following its decision to shut down its private banking business targeted at the rich. The branch rationalization would result in HSBC losing its tag of foreign bank with second largest branch network to Citibank, which has 45 branches.

"The affected roles are less than 1% of the total HSBC employee population in India," said a bank spokesperson. HSBC has 33,000 employees in India, which includes those working in the bank's global back office. Branches are being closed across India but Kolkata, with five branches being, shut faces the maximum impact.
"A key priority is the fair treatment of our staff and we will do everything we can to assist affected employees during this business transition. Redeployment opportunities will be accorded to the affected employees," the spokesperson said. A statement issued by the bank said that following a strategic review of its retail banking and wealth management business in India, HSBC has decided to consolidate 50 branches across 29 cities to 26 branches across 14 cities.
Stuart P Milne, group general manager and CEO, HSBC India, said: "This move aims to position our retail business for the future, with the right mix of digital versus physical branch distribution. Customer expectations are changing rapidly and we need to adapt accordingly. India is a priority market for HSBC and we will continue to invest to achieve sustainable growth by supporting the needs of our customers in retail banking and wealth management, global banking and markets, and commercial banking, businesses where we have scale and a highly differentiated proposition."
RBI governor Raghuram Rajan had said earlier last week that foreign banks are not expanding their presence in India as they need to set aside more capital in keeping with the higher risk weight. Other private bankers feel the same. "This is more a consequence of global situation and far less to do with Indian economy. It is driven by more intense regulation and compliance in home markets. These banks will find it very difficult to compete with Indian banks in private banking and retail banking. There are very few markets as attractive as India," said Rana Kapoor, MD & CEO, Yes Bank, on the issue of foreign banks scaling down their operations in India.
The branches that will be impacted include: Chennai (Adyar); Delhi (Punjabi Bagh and Basant Lok); Guwahati; Indore; Jodhpur; Kolkata (Shakespeare Sarani, Howrah, Ultadanga, New Alipore and Salt Lake); Lucknow; Ludhiana; Mumbai (Thane); Mysore; Nagpur; Nasik; Patna; Pune (Deccan); Raipur; Surat; Thiruvananthapuram; Vadodara; and Vishakhapatnam.