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HSBC has been censured by Britain's advertising watchdog after misleadingly claiming that customers would not be charged for making cash withdrawals overseas.

The Advertising Standards Agency (ASA) has ruled that the television advert in which the claim was made should not be shown again.

In the offending ad, six people from different countries hold up local currency after on- screen text saying "Who's on your banknote?" is shown.

A second message – "Whoever's on your banknotes with bank account plus you can withdraw them worldwide and we won't charge you" – then appears.

A complaint from Nationwide followed, with the building society claiming the ad was misleading because HSBC levied a charge of 2.75 per cent on currency conversions when withdrawing cash abroad.

"HSBC applied an exchange rate to all foreign currency transactions and that that rate covered the handling costs and processing fees of the transaction," a statement read.

In its adjudication the ASA noted that the 2.75 per cent adjustment was "essentially a transaction fee".

"Because there was no mention of the exchange rate fee in the on-screen text, and because we understood that cash machine withdrawals from overseas ATMs always incurred this charge, we concluded that the ad was misleading," a spokesperson confirmed.

HSBC had said in its defence that it did not charge any separate transaction fee for its bank account plus service that the television advert was promoting.

But it explained that the firm did apply an exchange rate to "any foreign exchange transaction" that fully complied with banking code requirements.

The bank also maintained that it remained cheaper to withdraw cash from an overseas ATM than to purchase foreign currency in a British HSBC branch.