By Monday afternoon, shares of Standard Chartered plummeted 6.18%. HSBC also plunged 5.33% to lows not seen in more than 25-years, according to FactSet. The moves came after the banks — among several global lenders — were identified in media reports as having allegedly moved suspicious funds over a period of nearly two decades, according to Reuters. The reports cited confidential documents submitted by banks to the U.S. government.
"We do not comment on suspicious activity reporting," HSBC said in a statement to CNBC. "Since 2012, HSBC has embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions."
Standard Chartered, meanwhile, said in a statement: "The reality is that there will always be attempts to launder money and evade sanctions; the responsibility of banks is to build effective screening and monitoring programmes to protect the global financial system."
"We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programmes," Standard Chartered wrote.
The U.S. government is expected to pursue fines, Amber Hill Capital's Jackson Wong told CNBC's "Street Signs Asia" on Monday. That means "more fine payments" for HSBC and Standard Chartered, he said, adding that such litigations "will not go away."
Major Asia-Pacific markets were lower on Monday, with Hong Kong's Hang Seng index leading losses, falling 2.06% to close at 23,950.69.
Mainland Chinese stocks saw losses on the day. The Shanghai composite was down 0.63% to about 3,316.94 while the Shenzhen component dipped 0.722% to around 13,149.50. China's benchmark lending rates, the one-year and five-year Loan Prime Rate (LPR), on Monday were kept unchanged at 3.85% and 4.65%, respectively.
Overall, the MSCI Asia ex-Japan index fell about 1%. Markets in Japan were closed on Monday for a holiday.
Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 2.06% to $42.26 per barrel. U.S. crude futures were 2.31% lower at $40.16 per barrel.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.14 following an earlier low of 92.749.
The Japanese yen traded at 104.02 per dollar after strengthening in the previous trading week from levels above 105.6 against the greenback. The Australian dollar changed hands at $0.7279 after touching an earlier an earlier high of $0.7324.