More than 100 former employees of HSBC Bangladesh have launched collective legal action against the global lender, alleging they were not properly compensated after losing their jobs following the closure of its retail banking business.
London-based financial publication The Banker, a Financial Times publication, reported on Monday that the former retail banking employees are pursuing legal action over redundancy payments and other benefits.
The employees claim HSBC failed to provide adequate redundancy packages and did not pay money they say is owed to them under the Workers’ Profit Participation Fund (WPPF), Bangladesh’s employee profit-sharing mechanism.
The legal action marks an escalation of a dispute that has been running for months since HSBC wound down its retail banking operations in Bangladesh.
HSBC announced in July 2025 that it would exit its International Wealth and Premier Banking, or retail banking, business in Bangladesh following a review of its market position and strategic fit. The bank said its Corporate and Institutional Banking business would remain unaffected.
The retail operation was subsequently wound down in phases. Former employees said 257 officials ultimately lost their jobs when the retail banking division closed on March 31 this year.
In July, the affected employees publicly accused HSBC of violating Bangladesh's labour laws and demanded compensation equivalent to 120 months’ salary.
They alleged HSBC classified them as “retrenched” employees in communications with Bangladesh Bank but issued them termination letters, which they claimed deprived them of benefits associated with retrenchment under labour law.
The employees also alleged unauthorised deductions from provident funds, problems with loan adjustments, discriminatory re-employment practices, increases in home-loan interest rates and withholding of release letters.
They said the compensation offered to them amounted to a maximum of 15 months’ salary. The former employees claimed HSBC had provided packages equivalent to as much as 120 months’ salary in India and 84 months in Sri Lanka during comparable restructuring exercises.
Those comparisons are claims made by the former employees and have not been independently verified by Daily Waadaa.
The dispute had already drawn scrutiny from Bangladesh Bank.
In July, the central bank sought an explanation from HSBC over the dismissal of the 257 employees and asked the lender to provide details within 14 working days on whether its compensation package complied with conditions imposed by the regulator.
Bangladesh Bank also sought information comparing previous and current compensation packages and questioned why employees had been required to sign a “Declaration of Release & Discharge” waiving legal claims.
The regulator additionally asked HSBC to demonstrate whether it had complied with all conditions attached to approval for closing its retail branches in Gulshan, Dhanmondi and Chattogram’s GEC Circle.
The WPPF claim could represent another significant element of the dispute.
HSBC Bangladesh's audited 2024 financial statements acknowledged uncertainty over whether banks fall within the WPPF provisions of the Bangladesh Labour Act.
The bank said management considered the probability of a legal obligation to make WPPF payments low and therefore had made no provision for such payments. However, it said it was retaining sufficient earnings to meet any future liability while the issue remained unresolved.
HSBC estimated that potential liability at 6.34 billion taka as of December 31, 2024, up from 5.45 billion taka a year earlier.
The Banker reported that the latest case involves more than 100 former HSBC Bangladesh employees acting collectively.
The publication's publicly accessible report did not specify the court or tribunal where the proceedings were filed, the amount being sought through the legal action, or HSBC's response to the claims.
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