This decision is understood to affect only a relatively small number of clients – in the hundreds. The bank declined to give a figure for the assets affected.
The move comes as the bank faces pressure from US authorities to provide information about account holders who may be evading taxes by using offshore accounts, particularly in India.
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Earlier this year, US prosecutors had alleged that HSBC India helped US residents evade federal taxes.
In a similar case, Swiss bank UBS agreed to pay a fine of US$780m in 2009, to close an investigation in the US when it was accused of supporting tax evasion.
HSBC has advised clients to close their accounts over the next 30 days, and has appointed a team of people to help transition clients to the US domestic private banking operation.
Very recently, Credit Suisse too admitted that it is being probed by US authorities for allegedly aiding its private banking clients evade taxes.
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