In a press release issued on Friday, HSBC said that "the merger has been approved by the boards of both banks and has received the approval of the Reserve Bank of India".

HSBC Bank Middle East was formerly known as the British Bank of the Middle East, and has only three branches located in Mumbai, New Delhi and Thiruvananthapuram. It has around 120 employees. Post-merger, HSBC will have nearly 3,000 employees and 26 branches.

"Unlike other countries where we normally have a single commercial banking operation, in India, for historical reasons, the group has had two commercial banks. We have now merged the operations of the two banks to bring about cost efficiencies in the delivery of a uniform level of service to our customers," Hongkong and Shanghai Banking Corporation's chief executive officer in India Dyfrig John said.

Existing customers of HSBC Bank Middle East will continue to have access to all services and products currently being offerred now. Their accounts will remain unchanged and deposits will earn interest at the same rates as those agreed with HSBC Bank Middle East.

"The credit facilities of corporate customers continue as before. Personal banking customers will now be able to enjoy the additional phone-banking, depository and select third party mutual funds services offered by the Hongkong and Shanghai Banking Corporation.

HSBC is among the foreign banks operating with a larger reach in India. Others include ANZ Grindlays Bank and StanChart. In India, HSBC offers a full range of financial services. It has 76 automated teller machines across 57 locations in the cities of Bangalore, Calcutta, Chennai, Gurgoan, Hyderabad, Mumbai, New Delhi, Thiruvantapuram and Vishakapatanam.