HKMA must keep pace with evolving circumstances, examine whether three-tier banking system still fit -deputy chief executive 
POLICY & REGULATION
HKMA must keep pace with evolving circumstances, examine whether three-tier banking system still fit -deputy chief executive 
POLICY & REGULATION

HKMA must keep pace with evolving circumstances, examine whether three-tier banking system still fit -deputy chief executive 

 

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Hong Kong Monetary Authority’s Deputy Chief Executive Arthur Yuen wrote in an article that about 180 authorized institutions are approved to operate banking services in Hong Kong currently, which are comprised of licensed banks (LBs), restricted licence banks (RLBs) and deposit-taking companies (DTCs). 

The HKMA must keep pace with evolving circumstances and examine whether the three-tier banking system is still fit for purpose in light of market developments, he said.

After the proposed simplification, the distinction between LBs and “second tier institutions” will be more pronounced, he said. 

LBs may offer a full range of banking services, and as the major target customers of some LBs include retail depositors, LBs are subject to a higher capital requirement (a minimum of HK$300 million).  As for the “second tier institutions”, while they cannot accept retail deposits, they may take large deposits of HK$500,000 or above without restriction on maturity, and the minimum capital requirement for these institutions will be standardised at HK$100 million, which is considered to be conducive to maintaining banking stability in Hong Kong.