More than 100 former retail employees of HSBC Bangladesh are taking collective legal action against the bank over allegations of improper payment following their redundancies.
The former workers claim that the financial institution failed to provide adequate redundancy packages and withheld money owed under the national Workers Profit Participation Fund, an employee profit-sharing scheme, reports The Banker.
HSBC announced the closure of its Bangladesh retail operations in July 2025, when approximately 270 staff members were informed of their job losses during a meeting led by local bank CEO Md Mahbub-ur-Rahman. Terms of the redundancy packages were disclosed during meetings with human resources in the following months.
Former staff told The Banker that the packages offered – equivalent to one month’s salary for each year of service – fell well below expectations, noting that earlier redundancy payouts by the bank had reached as high as 36 months’ salary.
Affected employees also alleged that provident funds, which are accrued by an employer and paid out as a lump sum upon departure, were in some cases applied to settle outstanding loans taken out at preferential rates with the bank.
Following the end of their contracts, interest on these loans was increased from a concessionary 3 per cent rate to over 12 per cent.
The country’s central bank, Bangladesh Bank, contacted HSBC in July to request clarification regarding its handling of the job losses. The Banker has also approached Bangladesh Bank for comment.
In response to the allegations, an HSBC spokesperson stated, “All staff concerns were handled in a fair manner in line with HSBC’s values.”
The division’s closure aligns with a broader global strategy by HSBC, which is winding down several international operations to concentrate on core areas such as wealth management and specific geographies including Hong Kong, the Middle East, and the UK.
In July, the bank also announced the closure of its retail business in Australia, shuttering 19 branches and selling its home loans portfolio to Blackstone.
Impacted Australian staff later told The Banker that they were notified of the closure on the same day as customers, following similar retail exits in Sri Lanka and Indonesia.
