More than 100 former employees of HSBC Bangladesh have started collective legal action against the bank. They say they were not properly paid after losing their jobs when the lender closed its retail banking business.
The Banker, a publication of the Financial Times, reported the news on Monday. The group is challenging the redundancy packages they received. They also say HSBC has not paid money they believe is owed under the Workers’ Profit Participation Fund, known as WPPF, which is Bangladesh’s profit sharing system for employees.
How the dispute began
HSBC announced in July 2025 that it would exit its International Wealth and Premier Banking business in Bangladesh. The bank said the decision followed a review of its market position and strategic fit. Its Corporate and Institutional Banking business was not affected.
The retail operation was then closed in phases. According to former employees, 257 officials lost their jobs when the division shut down on March 31 this year.
What the former employees are claiming
In July, the affected staff publicly accused HSBC of breaking Bangladesh’s labour laws. They demanded compensation equal to 120 months of salary.
They say HSBC described them as “retrenched” employees when it wrote to Bangladesh Bank, but gave them termination letters. In their view, this took away benefits that come with retrenchment under labour law.
The group also raised other complaints. These include unauthorised deductions from provident funds, problems with loan adjustments, unfair re employment practices, higher home loan interest rates and withheld release letters.
They say the best offer they received was 15 months of salary. They also claim HSBC gave packages worth up to 120 months of salary in India and 84 months in Sri Lanka during similar restructuring. These comparisons come from the former employees and have not been independently verified.
Bangladesh Bank asked for answers
The central bank had already stepped in. In July, Bangladesh Bank asked HSBC to explain the dismissal of the 257 employees within 14 working days. It wanted to know whether the compensation met the conditions set by the regulator.
It also asked for a comparison of earlier and current compensation packages. The regulator questioned why employees had to sign a “Declaration of Release & Discharge” that waived their legal claims.
Bangladesh Bank further asked HSBC to show that it followed all conditions linked to the approval for closing its retail branches in Gulshan, Dhanmondi and GEC Circle in Chattogram.
The WPPF question could matter most
The WPPF claim may become a major part of this case. HSBC Bangladesh’s audited 2024 financial statements said it was unclear whether banks fall under the WPPF rules of the Bangladesh Labour Act.
The bank said its management saw a low chance of a legal duty to pay, so it set aside no provision. It added that it was keeping enough earnings to cover any future liability if the issue remains unresolved.
HSBC estimated that possible liability at 6.34 billion taka as of December 31, 2024. A year earlier, the figure was 5.45 billion taka.
What we still do not know
The Banker’s public report did not say which court or tribunal is handling the case. It also did not mention how much the former employees are seeking or how HSBC has responded.
For now, the case shows how a business exit can quickly become a legal and regulatory test, especially when hundreds of jobs and a long running question about WPPF are involved.