Hong Kong stocks dropped 1.41 percent on Monday after China's central bank announced to raise the deposit reserve requirement ratio to curb the economy.

The benchmark Hang Seng index closed down 297.23 points, or 1. 41 percent, at 20,811.36. Market turnover totaled 49.29 billion HK dollars (6.36 billion U.S. dollars), significantly down from last Friday's 71.19 billion HK dollars.

The H-share index fell 236.24 points, or 1.94 percent, to close at 11,944.96 points.

HSBC, one of the world's biggest banks, shed 2.41 percent to close at 79 HK dollars per share, which was regarded as the main force dragging down the stock market.

Most H-share Chinese lenders slipped, which market analysts said that it was probably due to the announcement by the People's Bank of China on Sunday to hike the deposit reserve requirement ratio by half a percentage point from May 10.

Shares of ICBC, the world's largest bank by market value, edged down 1.56 percent, to close at 5.68 HK dollars per share. China Construction Bank, one of the country's four largest State-owned banks, dipped 1.56 percent to close at 6.32 HK dollars per share.

Another major lender, Bank of China, was down 1.72 percent to close at 4.01 HK dollars per share.

Heavyweight China Mobile, the world's largest mobile operator by subscribers, declined 0.78 percent, to close at 76.65 HK dollars per share.

Property players on the Chinese mainland were also believed affected by the newly released policy.

China Resources Land, a major State-owned property developer, plunged 5.11 percent to close at 13.74 HK dollars. Country Garden, a privately-owned property developer based in Guangdong province, dropped 3.7 percent to close at 2.34 HK dollars.